Stock Code:1301

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: No.100, Shuiguan Rd., Renwu Dist., Kaohsiung City 814, Taiwan (R.O.C.) Telephone: (07)371-1411 Telephone: (02)2712-2211

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of material accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information
9. List of major account titles Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. List of major account titles	Page
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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Formosa Plastics Corporation:

Opinion

We have audited the financial statements of Formosa Plastics Corporation(“the Company”), which comprise the balance sheet as of December 31, 2023 and 2022, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other auditors, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuer.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Company's financial statements are stated as follows:

1. Revenue recognition

As the control of products transfers at different points in time, it exposes the risk wherein revenue may not be recognized within the proper period. For this reason, revenue recognition is considered to be one of our key audit matters. The accounting policies and the related information for revenue recognition were discussed in Notes 4(o) and 6(r) to the financial statements.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

The principal audit procedures we have performed to address the aforementioned key audit matter included assessing the rationality of accounting treatment for revenue recognition; vouching the original sales documents according to the transactions with the customers during a selected period of time before and after the balance sheet date to evaluate whether the revenue is recorded appropriately.

2. Valuation of Inventories

The Group measured the cost and net realizable value of inventory and recognized a loss on the balance sheet date according to IAS 2 (including loss on obsolescence of inventories); however, to determine whether or not the loss of inventories should be recognized depends on the subjective judgment of the management. For this reason, the valuation of inventories is considered to be one of the key audit matters. The accounting policies and the related information for the valuation of inventories were discussed in Notes 4(g), 5 and 6(e) to the financial statements.

The principal audit procedures we have performed to address the aforementioned key audit matter included assessing the appropriateness of the policy on inventory valuation and slack loss recognition; ensuring whether the process of inventory valuation is in conformity with the accounting policies, confirming the sales price adopted by the management and the changes in the market price of inventory in the period after the balance sheet date; and sampling procedures to assess the reasonableness of the net realizable value of inventory.

Other Matter

We did not audit the financial statements of certain investee companies under equity method and the relevant information on the reinvestment business in Note 13 of the financial report has not been checked by this accountant, but is checked by other accountants. The Company's investments in the aforementioned investee companies constituted 34.86% and 33.57% of the total assets as of December 31, 2023 and 2022, respectively; and the recognized shares of profit of associates accounted for using equity method of these investee companies constituted 107.87% and 19.29% of the income before tax for the years ended December 31, 2023 and 2022, respectively. The financial statements of the aforementioned investee companies were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for these investee companies, is based solely on the reports of other auditors.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’ s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

3-2

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

3-3

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partners on the audit resulting in this independent auditors’ report are Kuo, Hsin-Yi and Ko, Hui-Chih.

KPMG

Taipei, Taiwan (Republic of China) March 6, 2024

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail.

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(a)) 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 1120 Current financial assets at fair value through other comprehensive income (Note 6(b)) 1170 Notes and accounts receivable, net (Note 6(c)) 1180 Accounts receivable`－`related parties (Notes 6(c) and 7) 1200 Other receivables (Note 6(d)) 1210 Other receivables`－`related parties (Notes 6(d) and 7) 130X Inventories (Note 6(e)) 1470 Other current assets Total current assets Non-current assets: 1510 Financial assets at fair value through other comprehensive income-non- current (Note 6(b)) 1550 Investments accounted for using equity method (Note 6(f)) 1600 Property, plant and equipment (Notes 6(g), 7 and 8) 1755 Right-of-use assets (Note 6(h)) 1780 Intangible assets 1840 Deferred income tax assets (Note 6(o)) 1900 Other non-current assets (Note 8) Total non-current assets Total assets	December 31, 2023 Amount % $ 1,590,917 - 1,641,598 - 90,739,431 19 6,885,974 1 3,995,752 1 1,825,263 - 3,868,172 1 13,973,181 3 2,989,461 1 127,509,749 26 18,308,129 4 282,247,552 57 56,676,279 11 1,336,947 - 132,381 - 1,058,474 - 7,611,634 2 367,371,396 74 $ 494,881,145 100	December 31, 2022 Amount % 8,979,747 2 1,562,720 - 86,948,159 18 7,694,413 2 4,687,408 1 1,205,377 - 7,523,237 1 14,302,555 3 3,908,290 1 136,811,906 28 16,428,859 3 275,797,968 57 51,626,928 11 631,554 - 140,000 - 1,098,911 - 6,698,084 1 352,422,304 72 489,234,210 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(i)) 2110 Short-term notes and bills payable (Note 6(j)) 2130 Current contract liabilities (Note 6(r)) 2170 Accounts payable 2180 Accounts payable`－`related parties (Note 7) 2200 Other payables 2220 Other payables`－`related parties (Note 7) 2280 Current lease liabilities (Note 6(m)) 2321 Current portion of bonds payable (Note 6(l)) 2322 Current portion of long-term borrowings (Notes 6(k) and 8) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2530 Bonds payable (Note 6(l)) 2540 Long-term debts (Notes 6(k) and 8) 2570 Deferred income tax liabilities (Note 6(o)) 2580 Non-current lease liabilities (Note 6(m)) 2640 Net defined benefit liabilities-non-current (Note 6(n)) 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity(Note 6(p)): 3110 Ordinary shares 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Total retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31, 2023	December 31, 2023		December 31, 2022
			Amount	%		Amount % 14,900,000 3 19,430,865 4 2,002,962 - 2,519,710 1 5,978,718 1 5,574,796 1 1,822,200 - 26,811 - 8,846,341 2 5,000,000 1 11,715,316 3 77,817,719 16 27,274,332 6 2,500,000 - 19,369,512 4 607,619 - 3,886,866 1 93,299 - 53,731,628 11 131,549,347 27 63,657,408 13 11,797,297 2 74,910,988 15 82,520,970 17 72,838,396 15 230,270,354 47 51,959,804 11 357,684,863 73 489,234,210 100
			$ 14,491,600 30,663,374 1,309,623 4,100,419 4,316,575 207,392 1,184,430 60,234 3,699,403 1,500,000 9,607,030 71,140,080 34,664,786 17,500,000 19,209,135 1,294,833 3,609,170 102,996 76,380,920 147,521,000 63,657,408 11,829,847 78,532,046 87,559,869 44,712,409 210,804,324 61,068,566 347,360,145 $ 494,881,145	3 6 - 1 1 - - - 1 - 2 14 7 4 4 - 1 - 16 30 13 2 16 18 9 43 12 70 100

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

4000
Operating revenue (Notes 6(r) and 7)
5000
Operating costs (Notes 6(e), (g), (h), (n), (s) and 7)
Gross profit from operations
5920
Add: Realized profit (loss) on from sales
Gross profit from operations
Operating expenses (Notes 6(c), (g), (h), (n), (s) and 7):
6100
Selling expenses
6200
Administrative expenses
6300
Research and development expenses
6450
Expected credit loss
Total operating expenses
Operating (loss) income
Non-operating income and expenses (Notes 6(f), (n), (t) and 7):
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of associates and joint ventures accounted for using equity
method
Total non-operating income and expenses
Profit from continuing operations before income tax
6400
Less: Income tax (benefit) expenses (Note 6(o))
Profit
8300
Other comprehensive income (loss) (Notes 6(n), (o) and (p)):
8310
Items that may not be reclassified subsequently to profit or loss:
8311
(Losses) gains on remeasurements of defined benefit plans
8316
Unrealized gains (losses) from investments in equity instruments measured
at fair value through other comprehensive income
8330
Share of other comprehensive income of subsidiaries, associates and joint
ventures accounted for using equity method, components of other
comprehensive income that will not be reclassified to profit or loss
8349
Income tax related to components of other comprehensive income that will
not be reclassified to profit or loss
8360
Items that may be reclassified subsequently to profit or loss:
8361
Exchange differences on translation of foreign financial statements
8380
Share of other comprehensive income of subsidiaries, associates and joint
ventures accounted for using equity method, components of other
comprehensive income that will be reclassified to profit or loss
8399
Income tax related to components of other comprehensive income that will
be reclassified to profit or loss
Components of other comprehensive income that will be reclassified to
profit or loss
8300
Other comprehensive income (loss)
Total comprehensive income
9710
Basic/Diluted earnings per share (NT dollars) (Note 6(q))

2023

See accompanying notes to financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

	Capital surplus	Retained earnings	Retained earnings		Total other equity interest	Total other equity interest
				Exchange differences on translation of foreign financial statements (12,738,403) - 12,135,050 12,135,050 - - - - - - (603,353) - (1,321,183) (1,321,183) - - - - - - (1,924,536)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 94,230,777 - (42,592,303) (42,592,303) - - - - - - 51,638,474 - 10,420,158 10,420,158 - - - - - - 62,058,632	Gains (losses) on hedging instruments 10,962 - (88,872) (88,872) - - - - - - (77,910) - 9,787 9,787 - - - - - - (68,123)
		Legal reserve 67,780,313 - - - 7,130,675 - - - - - 74,910,988 - - - 3,621,058 - - - - - 78,532,046	Special reserve
$ $	11,770,685		71,352,267
	- -		- -
	-		-
	- - - - 171 26,441		- 11,168,703 - - - -
	11,797,297 - -		82,520,970 - -
	-		-
	- - - - 230 32,320		- 5,038,899 - - - -
	11,829,847		87,559,869

See accompanying notes to financial statements.

(English Translation of and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Cash Flows

For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expenses Amortization expenses Expected credit losses Interest expenses Net gains on financial assets at fair value through profit Interest revenue Dividend income Share of profit of associates and joint ventures accounted for using equity method Gains on disposal of property, plant and equipment Gains on early termination of contract Realized losses (gains) from sales Unrealized foreign exchange losses Unrealized gains from affiliated company Total adjustments to reconcile loss Changes in operating assets and liabilities: Changes in operating assets: Notes and accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities (including contract liabilities) Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets designated at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (Increase) in other receivables - related parties Acquisition of intangible assets Increase in other non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term debt Repayments of long-term debt Payment of lease liabilities Decrease in other non-current liabilities Cash dividends paid Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 6,896,883 4,408,735 282,352 11,826 1,300,703 (78,878) (268,584) (3,667,671) (5,378,110) (388,794) - 36,035 292,032 - (3,450,354) 532,941 691,656 (808,689) 786,787 381,039 918,828 2,502,562 1,598,556 (1,662,143) 493,122 (637,770) (2,880,181) (434,752) (3,523,168) (1,020,606) (4,470,960) 2,425,923 248,927 7,925,321 (1,281,897) (5,089,161) 4,229,113 6,848 - (2,048,600) (9,806,239) 772,761 2,862,928 - (1,160,400) (9,372,702) 148,307,926 (148,716,326) 11,300,000 11,100,000 (8,850,000) 12,500,000 (1,000,000) (72,235) (24,668) (26,745,324) (2,200,627) (44,614) (7,388,830) 8,979,747 $ 1,590,917	2022 42,583,391 4,111,118 266,160 236 689,196 (192,016) (127,158) (8,441,831) (6,108,735) (34,240) (2,319) (60,304) 123,984 (419,631) (10,195,540) 3,735,430 1,607,903 151,245 330,086 (27,122) (1,403,923) 4,393,619 (1,841,141) (2,032,412) 84,904 593,428 1,614,418 (2,128,934) (3,709,737) 683,882 (9,511,658) 33,071,733 98,035 20,940,421 (718,942) (9,433,672) 43,957,575 4,250 2,422,695 (3,096,710) (9,506,929) 37,625 (2,730,465) (15,873) (268,607) (13,154,014) 129,692,300 (119,276,976) 17,350,000 - (9,400,000) 7,500,000 - (47,076) (1,433,847) (52,172,634) (27,788,233) 18,188 3,033,516 5,946,231 8,979,747

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Formosa Plastics Corporation (the “Company”) was incorporated on November 5, 1954, and established its factories in Kaohsiung City. The Company engage in the manufacture and sale of plastic raw materials, chemical fibers, and petrochemical products. The Company has gone through several capital increases and established many divisions, and become a well-diversified enterprise.

(2) Approval date and procedures of the financial statements:

The accompanying financial statements of the Company for the years ended 2023 were approved and authorized for issue by the Board of Directors on March 6, 2024.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023:

●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Company has initially adopted the new amendment, which do not have a significant impact on its financial statements, from May 23, 2023:

●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements:

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Non-current Liabilities with Covenants”
●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IFRS 10 and
IAS 28 “Sale or Contribution
of Assets Between an Investor
and Its Associate or Joint
Venture”
Amendments to IAS21“Lack
of Exchangeability”

Content of amendment
Effective date per
IASB
The amendments address an acknowledged
inconsistency between the requirements in
IFRS 10 and those in IAS 28 (2011) in
dealing with the sale or contribution of
assets between an investor and its associate
or joint venture.
The main consequence of the amendments
is that a full gain or loss is recognized
when a transaction involves a business
(whether it is housed in a subsidiary or
not). A partial gain or loss is recognized
when a transaction involves assets that do
not constitute a business, even if these
assets are housed in a subsidiary.
Effective date to be
determined by IASB
The amendments set out:
●when a currency is exchangeable into
another currency; and
●how a company determines an estimated
spot rate when a currency lacks
exchangeability.
January 1, 2025

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(4) Summary of material accounting policies:

The material accounting policies presented in the consolidated financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These annual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “ the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C (hereinafter referred to IFRSs as endorsed by the FSC).

(b) Basis of preparation

Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

(i) Financial assets at fair value through other comprehensive income are measured at fair value;
(ii) The defined benefit liabilities (assets) are measured as the fair value of the plan assets, less the present value of the defined benefit obligation.

Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entities operate. The financial statements are presented in NTD, which is the Company’ s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(c) Foreign currencies
(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

‧ an investment in equity securities designated as at fair value through other comprehensive income;
‧ a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
‧ qualifying cash flow hedges to the extent that the hedges are effective.
(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations, are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planed nor likely in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash and cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

A liability is classified as current under one of the following criteria. and all other liabilities are classified as non-current.

(i) It is expected to be settled in normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI )

Some accounts receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Company, therefore, those receivables are measured at FVOCI. However, they are included in the ‘ trade receivables’ line item.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Company intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘trade receivables’ line item. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

‧ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’ s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
‧ how the performance of the portfolio is evaluated and reported to the Company’ s management;
‧ the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
‧ how managers of the business are compensated ─ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
‧ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

‧ contingent events that would change the amount or timing of cash flows;
‧ terms that may adjust the contractual coupon rate, including variable rate features;
‧ prepayment and extension features; and
‧ terms that limit the Company’s claim to cash flows from specified assets (e.g. nonrecourse features)
6) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧ debt securities that are determined to have low credit risk at the reporting date; and
‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧ significant financial difficulty of the borrower or issuer;
‧ a breach of contract such as a default or being more than 90 days past due;
‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

7) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

3) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control, or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the or Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes, of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from the transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interest in associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i)

Subsidiaries

The Company accounts the investee companies that it possesses control using the equity. Net income, other comprehensive income, and shareholder’ s equity in the financial reports of the Company and the net income, other comprehensive income, and shareholder’s equity that belongs to the Consolidated Company in the consolidated financial reports should be the same.

The Company accounts the changes in equity, under the condition that control is still present, as equity transactions between the proprietors. When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(j) Joint venture

A joint venture is a joint arrangement whereby the Company has joint control of the arrangement in which the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless the Company qualifies for exemption from that Standard. Please refer to note 4(h) for the application of the equity method.

When assessing the classification of a joint arrangement, the Company considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Company reevaluates whether the classification of the joint arrangement has changed.

(k) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) Buildings and constructions: 3 to 55 years.
2) Machinery and equipment: 2 to 25 years.
3) Other facilities: 3 to 15 years.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(l) Lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

－ fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
－ amounts expected to be payable under a residual value guarantee; and
－ payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－ there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
－ there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset,
－ there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
－ there is any lease modifications

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of plant and building that have a lease term of 12 months or less and leases of lowvalue assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a leasor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’ s net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(m) Intangible assets

(i) Recognition and measurement

Goodwill arising on the acquisition of Yung Chia Chemical Industries Corp. in 2003, is measured at cost, less accumulated impairment losses.

Other intangible assets, including technical development expense, that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(n) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs) . Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(o) Revenue recognition
(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

1) Sale of goods–plastic raw materials, chemical fibers, and petrochemical products.

The Company manufactures and sells plastic raw materials, chemical fibers, and petrochemical products to downstream manufacturers. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’ s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Construction contracts

The Company enters into contracts to the development of electronic components and software products. Because its customers controls the development process of the said items, the Company recognizes revenue over time on the basis of the construction costs incurred to date as a proportion of the total estimated costs of the contract. The Company recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Company has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

If the Company cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Company shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Company expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(p) Contract costs

(i) Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

(ii) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

‧ the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;
‧ the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
‧ the costs are expected to be recovered.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(q) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Company has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income tax in the scope of IAS 12. The Company has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

Current tax comprises the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profits (losses) and does not give rise to equal taxable and deductible temporary differences;
(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously; in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Deferred tax asset are recognized for the carry forward of unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(s) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as effect of employee share bonus.

(t) Operating segments

The Company discloses its information on operating segments in its consolidated financial statements, so it need not disclose such information in the parent company only financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the financial statements in conformity with the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

Judgment of whether the Group has substantive control over its investees, the Company discloses its information on operating segments in its consolidated financial statements by 2023.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows.

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(e) for further description of the valuation of inventories.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Bank deposit Cash equivalents Repurchase bonds Time deposits	December 31, 2023 $ 362 948,233 - 642,322 $ 1,590,917	December 31, 2022
		298 2,079,851 6,899,598 -
		8,979,747

Please refer to Note 6(u) for the fair value sensitivity analysis and interest rate risk of the financial assets and liabilities of the Company.

(b) Financial assets at fair value through profit or loss and other comprehensive income

December 31, 2023 (i) Mandatorily at FVTPL Private fund $ 1,641,598 Please refer to Notes 6(t) for amount of remeasurement at FVTPL. December 31, 2023 (ii) Equity investments at fair value through other comprehensive income Current: Domestic listed stocks (Exchange and Mainboard) $ 90,590,581 Domestic listed stocks (Emerging stock board) 148,850 Non-current: Non-listed stocks 5,127,160 Foreign non-listed stocks 13,180,969 Total $ 109,047,560	December 31, 2022
	1,562,720
	December 31, 2022
	86,772,334 175,825 5,232,499 11,196,360
	103,377,018

Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity instruments as at fair value through other comprehensive income because these equity instruments represent those investments that the Group intends to hold for long-term for strategic purposes.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2023 and 2022.

Notes receivable from operating activities Accounts receivable (including related parties)`－`at amortized cost Account receivables -at fair value through other comprehensive income Less : allowance for doubtful receivables	December 31, 2023 $ 149,200 10,427,089 382,492 (77,055) $ 10,881,726	December 31, 2022 178,029 12,141,515 127,506 (65,229) 12,381,821

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2023 and 2022. To measure the expected credit losses,notes receivables and accounts receivables have been grouped based on shared credit risk characteristics according to the customers contract regulations of payment ability on due date; and the days past due, as well as the incorporated forward-looking information.The Company's note receivables and account receivables expected credit losses are analysed as follows: The loss allowance provision were determined as follows:

December 31, 2023	December 31, 2023
Gross carrying amount $ 10,006,386 857,297 86,958 8,140 $ 10,958,781	Weighted- average loss rate 0.001~0.139% 3.222% 35.183% 76.867%	Loss allowance provision
		12,584 27,619 30,595 6,257
		77,055

December 31, 2022	December 31, 2022
Gross carrying amount $ 12,036,577 351,204 36,669 22,600 $ 12,447,050	Weighted- average loss rate 0.192% 4.384% 34.373% 68.902%	Loss allowance provision
		21,652 15,398 12,607 15,572
		65,229

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The movement of the allowance for doubtful receivable were as follows:

Beginning balance Impairment losses recognized Ending balance	For the years ended December 31,	For the years ended December 31,
	2023 $ 65,229 11,826 $ 77,055	2022 64,993 236 65,229

The Company entered into a factoring and financing agreement (without-recourse) with a financial institution. According to the contract, the net accounts receivable that have matured but are still uncollected will be paid by the financial institution, except for those affected by trade disputes. As of December 31, 2023, the outstanding accounts receivable factoring transaction between The Company and the financial institution was as follows:

		31, 2023
Purchaser	Factoring Balance Factoring Line Advanced Amount USD 12,907 $ 609,840 USD 462 $ 396,695 - 14,203 December 31, 2022		Range of Interest Rate Guarantee project 6.527%~6.573% None
CITIBANK
Purchaser	Factoring Balance Factoring Line USD 4,152 $ 288,000 $ 127,506 -	Advanced Amount - -	Range of Interest Rate Guarantee project - None
CITIBANK

(d) Other receivables

Other receivable`－`loans to related parties Other receivable`－`related parties Other receivables	December 31, 2023 $ 2,489,727 1,378,445 1,825,263 $ 5,693,435	December 31, 2022
		5,352,654 2,170,583 1,205,377
		8,728,614

As of December 31, 2023 and 2022, the aging analysis of other receivables were not recognized which estimated by the Company.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(e) Inventories

Finished goods Work in process Raw materials Supplies Machinery and accessories in process Others Change of net realizable value of inventories Loss from devaluation of inventories	December 31, 2023 December 31, 2022 $ 9,534,023 9,518,797 1,089,469 1,542,207 1,567,923 1,291,295 233,507 243,065 1,512,904 1,698,273 35,355 8,918 $ 13,973,181 14,302,555 For the years ended December 31,	December 31, 2022
		9,518,797 1,542,207 1,291,295 243,065 1,698,273 8,918
		14,302,555
	2023 $ 4,471	2022 438,590

The changes in net realizable value of the above inventories have been recognized as cost of goods sold.

(f) Investments accounted for using equity method

The components of the investments accounted for using equity method were as follows:

Subsidiaries
Formosa Plastics Corp. (Cayman Ltd.)
Formosa Industries Corporation
Associates
Formosa Petrochemical Corporation
Formosa Plastics Corp., U.S.A.
Formosa Heavy Industries Corp.
Sky Dragon Investment Limited
Mai Liao Power Corp.
Formosa Sumco Technology Corporation
Formosa Transportation Corp.
Formosa Fairway Corp.
Yi-Jih Development Corp.
Ya Tai Development Corp.
Formosa Automobile Corporation
Wha Ya Park Management Consulting Corporation Ltd.

December 31,
2023
December 31,
2022
$ 53,929,869
54,723,698
11,536,884
13,908,448
95,893,554
89,018,096
76,598,468
75,212,016
6,664,662
7,161,374
631,603
3,122,370
13,805,045
9,768,599
7,395,360
7,216,118
1,237,189
1,210,265
5,572
22,825
19,651
19,667
19,646
19,662
390,857
508,991
4,299
4,140

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Smart Energy Tech Corporation Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	December 31, 2023 $ 234,962 7,714,128 1,051,647 835,318 1,733,910 979,254 1,336,390 229,284 $ 282,247,552	December 31, 2022
		231,815 8,358,827 578,907 766,964 1,000,818 1,261,244 1,345,390 337,734
		275,797,968

For the years ended 2023 and 2022, the share of net income (loss) of subsidiaries, associates and joint ventures were as follows:

For the years ended December 31,
2023
2022
$ 142,111
2,589,699
(2,418,167)
(2,788,445)
6,234,378
4,218,733
1,205,482
3,997,097
(617,732)
(590,385)
(2,489,269)
(1,487,779)
3,104,370
(1,126,063)
1,005,129
1,401,186
29,662
(15,579)
(13,791)
(11,008)
(16)
(15)
(16)
294
76,565
216,682
128
419
3,126
2,586
(766,156)
(213,612)
(7,719)
(14,878)
68,656
31,789
(16,908)
818

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	For the years ended December 31,	For the years ended December 31,
	2023 $ (44,431) (8,842) (108,450) $ 5,378,110	2022
		3,551 13,010 (119,365)
		6,108,735

(i) Subsidiaries

1) On July 29, 2022, the Company participated in the capital increase by cash of Formosa Industries Corporation, by acquiring additional shares of stock amounting to US$70,000 thousand (equivalent to $2,096,710 thousand).

(ii) Associates

1) The information of the major associate of the investments accounted for using the equity method was as follows:

Associates	Relationship	Registration Country	Percentage of ownership
			December 31, 2023 December 31, 2022 % 28.56 % 28.56 % 22.66 % 22.66
Formosa Petrochemical Corporation Formosa Plastic Corp. U.S.A.	Formosa Petrochemical Corporation, the supplier of raw materials for the Company, engages in the manufacturing and sales of petroleum products and petrochemical raw materials. Formosa Plastics Corp., U.S.A, engages in the manufacturing and sales of oil, plastic raw materials, and petrochemical raw materials, and is also the sales target of the Company.	Taiwan U.S.A

The fair value of investments in publicly traded stocks of the major associate was as follows:

Formosa Petrochemical Corporation	December 31, 2023 $ 219,548,305	December 31, 2022
		218,460,086

The following is the aggregated financial information of the major associate, and necessary changes have already been made to the information therein concerning the associates' consolidated financial statements based on the IFRS as endorsed by FSC to reflect the fair value adjustments made at the time of acquisition and adjustment for accounting policy variations.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The financial information of Formosa Petrochemical Corporation was as follows:

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net asset
Net asset contributed to non-controlling interest of
Formosa Petrochemical Corporation
Net asset contributed to Formosa Petrochemical
Corporation
Revenue
Net income
Other comprehensive income (loss)
Total comprehensive income (loss)
Comprehensive (loss) income allocated to non-controlling interest
of Formosa Petrochemical Corporation
Comprehensive income (loss) allocated to Formosa Petrochemical
Corporation
Beginning balance of share of net assets of associates at
January 1
Total comprehensive income (loss) allocated to the
Company
Dividend Received
Share of net assets of affiliates as of December 31
Add : share premium acquired not according to holding
percentage
Add : adjustment of net value
Total carrying amount of equity of the major associate as of
December 31

December 31,
2023
December 31,
2022
$ 257,789,731
267,202,843
158,371,896
154,578,625
(44,489,619)
(69,784,532)
(30,453,810)
(34,711,571)
$
341,218,198
317,285,365
$
4,883,912
4,796,931
$
336,334,286
312,488,434
For the years ended December 31,
2023
2022
$
712,576,194
848,048,496
$ 21,875,854
14,399,662
12,439,351
(22,673,007)
$
34,315,205
(8,273,345)

$
(8,458)
448,211

$
34,323,663
(8,721,556)
For the years ended December 31,
2023
2022
$ 89,018,096
101,830,792
9,838,584
(2,483,120)
(2,992,604)
(10,338,086)
95,864,076
89,009,586
213
168
29,265
8,342
$
95,893,554
89,018,096

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The financial information of Formosa Plastics Corp., U.S.A. was as follows:

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net asset
Net asset contributed to non-controlling interest of
Formosa Plastics Corp., U.S.A.
Net asset contributed to Formosa Plastics Corp.,
U.S.A.
Revenue
Net income
Other comprehensive income (loss)
Total comprehensive income
Comprehensive income (loss) allocated to non-controlling interest
of Formosa Plastics Corp., U.S.A.
Comprehensive income allocated to Formosa Plastics Corp.,
U.S.A.
Beginning balance of share of net assets of associates at
January 1
Total comprehensive income allocated to the Company
Dividend Received
Add: Net adjustment
Total carrying amount of equity of the major associate as of
December 31

December 31,
2023
December 31,
2022
$ 147,205,375
129,941,885
262,143,348
271,584,500
(19,393,491)
(18,827,535)
(39,884,496)
(40,225,300)
$
350,070,736
342,473,550
$
12,002,585
11,108,281
$
338,068,151
331,365,269
For the years ended
December 31,
2023
2022
$
147,708,992
199,665,842
$ 6,217,686
16,829,791
2,132,493
(8,521,735)
$
8,350,179
8,308,056

$
897,277
(811,459)
$
7,452,902
9,119,515
For the years ended
December 31,
2023
2022
$ 75,212,016
67,037,893
1,478,637
9,523,955
-
(1,349,832)
(92,185)
-
$
76,598,468
75,212,016

2) The information of the minor associate of the investments accounted for using the equity method was as follows:

Total carrying amount of equity of the minor associates	December 31, 2023 $ 41,743,849	December 31, 2022
		39,991,342

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Attributable to the Company: Net income (loss) Other comprehensive income Total comprehensive income (loss)	For the years ended December 31, 2023 2022 $ 376,029 (1,805,545) 346,172 270,187 $ 722,201 (1,535,358)
	2023 $ 376,029 346,172 $ 722,201

3) On November 9, 2023, the Company participated in the capital increase by cash of Formosa Plastics Construction Corporation, an associate owned by the Company, with the totalinvestment amounting to $500,000 thousand based on its original shareholding ratio of 25%.
4) On August 23, 2023, the Company participated in the capital increase by cash of Formosa Resources Corporation, an associate owned by the Company, with the total investment amounting to USD25,000 thousand (equivalent to $798,600 thousand) based on its original shareholding ratio of 25%.
5) On July 28, 2023, and May 31, 2022, the Company participated in the capital increase by cash of Formosa Smart Energy Tech Corporation, an associate owned by the Company, with the total investment amounting to $750,000 thousand and $1,000,000 thousand based on its original shareholding ratio of 25%.
(iii) Joint ventures

The Company’s investments in joint ventures are not significant. The financial information of the minor joint ventures of the investments accounted for using equity method was as follows:

Total carrying amount of investments in the minor joint ventures Attributable to the Company: Net loss Other comprehensive income (loss) Total comprehensive loss	December 31, 2023 December 31, 2022 $ 2,544,928 2,944,368 For the years ended December 31, 2023 2022 $ (161,723) (102,804) 362 (2,045) $ (161,361) (104,849)
	2023 $ (161,723) 362 $ (161,361)

(iv) Collaterals

There are no investments accounted for using the equity method which were pledged to banks as collateral to secure the Company’s bank loans as of December 31, 2023 and 2022.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(g) Property, plant and equipment

The movements of cost and accumulated depreciation and impairments of property, plant and equipment of the Company for the years ended 2023 were as follows:

Land Cast: Balance as of January 1, 2023 $ 11,771,035 Additions 63,385 Disposals (380,870) Reclassification - Balance as of December 31, 2023 $ 11,453,550 Balance as of January 1, 2022 $ 10,983,940 Additions 787,095 Disposals - Reclassification - Balance as of December 31, 2022 $ 11,771,035 Accumulated depreciation/impairment: Balance as of January 1, 2023 $ - Depreciation for the year - Disposals - Reclassification - Balance as of December 31, 2023 $ - Balance as of January 1, 2022 $ - Depreciation for the year - Disposals - Reclassification - Balance as of December 31 , 2022 $ - Carrying amounts:`：` Balance as of December 31 , 2023 $ 11,453,550 Balance as of December 31 , 2022 $ 11,771,035	Land		Buildings and constructions		Machinery and equipment		Other facilities		Construction in progress 14,886,928 8,380,125 - (5,220,810) 18,046,243 9,905,333 7,212,080 - (2,230,485) 14,886,928 - - - - - - - - - - 18,046,243 14,886,928	Total 196,893,114 9,806,239 (1,941,410) (51,054)
										204,706,889
										188,457,297 9,506,929 (1,113,909) 42,797
										196,893,114
										145,266,186 4,321,256 (1,557,443) 611
										148,030,610
										142,314,417 4,061,358 (1,110,524) 935
										145,266,186
										56,676,279
										51,626,928

(i) Collaterals

The property, plant and equipment pledged to secure bank loans as of December 31, 2023 and 2022, are described in Note 8.

(ii) As of December 31, 2023 and 2022, the Company’ s parcels of land with title temporarily registered under the names of third parties for trust purpose had carrying value as of $33,529 thousand which were recorded under property, plant and equipment. The Company has implemented a deed of trust with the authorities to secure the Company’s rights related to the abovementioned properties.
(iii) Please refer to Note 6(t) for further information about the capitalized interest on borrowings for the purchase of the property, plant and equipment and gain on disposal of property, plant and equipment.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(h) Right-of-use assets

The Company leases many assets including land and buildings, vehicle and machinery Information about cost, depreciation and impairment are as follows:

Cost: Balance at January 1, 2023 Additions Disposals Balance at December 31, 2023 Balance at January 1, 2022 Additions Disposals Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Depreciation for the period Disposals Balance at December 31, 2023 Balance at January 1, 2022 Depreciation for the period Disposals Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 Balance at December 31, 2022	Land $ 647,848 792,872 (15,877) $ 1,424,843 $ 167,923 627,248 (147,323) $ 647,848 $ 16,294 87,479 (15,877) $ 87,896 $ 22,828 49,760 (56,294) $ 16,294 $ 1,336,947 $ 631,554	Buildings - - - - - - - - - - - - - - - - - -	Total 647,848 792,872 (15,877) 1,424,843 167,923 627,248 (147,323) 647,848 16,294 87,479 (15,877) 87,896 22,828 49,760 (56,294) 16,294 1,336,947 631,554

For the years ended December 31, 2023 and 2022, the Company increased the right-of-use assets, please refer to Notes 6(m).

(i) Short-term borrowings

(i) Short-term borrowings consisted of the following:

Unsecured short-term borrowings Interest rate	December 31, 2023 $ 14,491,600 0.0165%~1.69%	December 31, 2022
		14,900,000
		0.776%~1.540%

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Issuance and redemption of loans

Balance as of January 1, 2023 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of December 31, 2023

Balance as of January 1, 2022 New issuance during the period Repayments during the period Balance as of December 31, 2022

Total $ 14,900,000 148,307,926 (148,716,326) - $ 14,491,600 Total $ 4,484,676 129,692,300 (119,276,976) $ 14,900,000

(j) Short-term notes and bills payable

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Less: Discount on short-term notes and bills payable Total	December 31, 2023 Institutions Interest rate Amount Union Bank of Taiwan Co., Ltd. 1.4000% $ 400,000 International Bills Finance Corporation 1.510%~1.545% 1,400,000 China Bills Finance Corporation 1.430%~1.545% 7,650,000 Bank SinoPac 1.500%~1.545% 550,000 Yuanta Commercial Bank Co., Ltd. 1.510% 1,000,000 Taishin International Bank Co., Ltd. 1.405%~1.455% 2,700,000 Mega Bills Finance Co., Ltd. 1.430%~1.545% 3,550,000 CTBC Bank Co., Ltd. 1.430%~1.545% 8,200,000 E.SUN Commercial Bank, Ltd. 1.554%~1.560% 3,800,000 Fubon Commercial Bank, Ltd. 1.500%~1.525% 1,500,000 30,750,000 (86,626) $ 30,663,374
	Institutions
	Union Bank of Taiwan Co., Ltd. International Bills Finance Corporation China Bills Finance Corporation Bank SinoPac Yuanta Commercial Bank Co., Ltd. Taishin International Bank Co., Ltd. Mega Bills Finance Co., Ltd. CTBC Bank Co., Ltd. E.SUN Commercial Bank, Ltd. Fubon Commercial Bank, Ltd.

Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Less: Discount on short-term notes and
bills payable
Total

December 31, 2023
Institutions
Interest rate
Amount
Union Bank of Taiwan Co., Ltd.
1.4000%
$ 400,000
International Bills Finance
Corporation
1.510%~1.545%
1,400,000
China Bills Finance Corporation 1.430%~1.545%
7,650,000
Bank SinoPac
1.500%~1.545%
550,000
Yuanta Commercial Bank Co.,
Ltd.
1.510%
1,000,000
Taishin International Bank Co.,
Ltd.
1.405%~1.455%
2,700,000
Mega Bills Finance Co., Ltd.
1.430%~1.545%
3,550,000
CTBC Bank Co., Ltd.
1.430%~1.545%
8,200,000
E.SUN Commercial Bank, Ltd.
1.554%~1.560%
3,800,000
Fubon Commercial Bank, Ltd.
1.500%~1.525%
1,500,000
30,750,000
(86,626)
$
30,663,374

Institutions

Union Bank of Taiwan Co., Ltd.
International Bills Finance
Corporation
China Bills Finance Corporation
Bank SinoPac
Yuanta Commercial Bank Co.,
Ltd.
Taishin International Bank Co.,
Ltd.
Mega Bills Finance Co., Ltd.
CTBC Bank Co., Ltd.
E.SUN Commercial Bank, Ltd.
Fubon Commercial Bank, Ltd.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Less: Discount on short-term notes and bills payable Total	December 31, 2022 Institutions Interest rate Amount Bank SinoPac 1.52% $ 950,000 Union Bank of Taiwan Co., Ltd. 1.50%~1.54% 600,000 International Bills Finance Corporation 1.52%~1.54% 7,500,000 China Bills Finance Corporation 1.52%~1.54% 2,850,000 Grand Bills Finance Corporation 1.52%~1.54% 1,950,000 CTBC Bank Co., Ltd. 1.52% 1,100,000 Yuanta Commercial Bank Co., Ltd. 1.54% 500,000 E.SUN Commercial Bank, Ltd. 1.55% 3,000,000 Taishin International Bank Co., Ltd. 1.36% 1,000,000 19,450,000 (19,135) $ 19,430,865
	Institutions
	Bank SinoPac Union Bank of Taiwan Co., Ltd. International Bills Finance Corporation China Bills Finance Corporation Grand Bills Finance Corporation CTBC Bank Co., Ltd. Yuanta Commercial Bank Co., Ltd. E.SUN Commercial Bank, Ltd. Taishin International Bank Co., Ltd.

Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Less: Discount on short-term notes and
bills payable
Total

December 31, 2022
Institutions
Interest rate
Amount
Bank SinoPac
1.52%
$ 950,000
Union Bank of Taiwan Co., Ltd.
1.50%~1.54%
600,000
International Bills Finance
Corporation
1.52%~1.54%
7,500,000
China Bills Finance Corporation
1.52%~1.54%
2,850,000
Grand Bills Finance Corporation
1.52%~1.54%
1,950,000
CTBC Bank Co., Ltd.
1.52%
1,100,000
Yuanta Commercial Bank Co.,
Ltd.
1.54%
500,000
E.SUN Commercial Bank, Ltd.
1.55%
3,000,000
Taishin International Bank Co.,
Ltd.
1.36%
1,000,000
19,450,000
(19,135)
$
19,430,865

Institutions

Bank SinoPac
Union Bank of Taiwan Co., Ltd.
International Bills Finance
Corporation
China Bills Finance Corporation
Grand Bills Finance Corporation
CTBC Bank Co., Ltd.
Yuanta Commercial Bank Co.,
Ltd.
E.SUN Commercial Bank, Ltd.
Taishin International Bank Co.,
Ltd.

(k) Long-term debts

(i) Long-term debts consisted of the following:

Unsecured long-term debts Less: Current portion Total Repayment period Interest rate	December 31, 2023 $ 19,000,000 (1,500,000) $ 17,500,000 2024 1.173%~1.79%	December 31, 2022 7,500,000 (5,000,000) 2,500,000 2024 1.173%~1.52%

(ii) Issuance and redemption of loan

Balance of January 1, 2023 New issuance during the period Repayment during the period Balance of December 31, 2023 Balance of January 1, 2022 New issuance during the period Balance of December 31, 2022	Total $ 7,500,000 12,500,000 (1,000,000) $ 19,000,000 Total $ - 7,500,000 $ 7,500,000

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(iii) Joint Credit Agreement

In order to secure working capital for its operational turnover, the Group has entered into a joint loan agreement with a consortium of seventeen financial institutions, with Hua Nan Commercial Bank as the lead bank, on April 14, 2023, as follows:

1) Credit line: $12,500,000 thousand.
2) Interest Rate: as settled with each participating bank.
3) Period: 3 years (including an 1-year extension).
4) The following financial ratios in the Company's annual audited and certified financial statements, included in the contractual restrictions, must comply with specified requirements. Failure to do so will result in the suspension of credit utilization or immediate repayment of outstanding loans:
- a) Current Ratio (Current Assets / Current Liabilities): Not less than one hundred percent.
- b) Debt Ratio (Total Liabilities / Net Worth): Not exceeding one hundred and fifty percent.
5) As of December 31, 2023, all financial ratios of the Group have complied with the provisions stated in the joint credit agreement.
(iv) Secured bank loans

The assets pledged to secure long-term loans are described in Note 8.

(l) Bonds payable
(i) Bonds payable consisted of the following:

Domestic unsecured nonconvertible corporate bonds Less: current portion Total Expiry	December 31, 2023 $ 38,364,189 (3,699,403) $ 34,664,786 2023~2031	December 31, 2022 36,120,673 (8,846,341) 27,274,332 2023~2030

(ii) Issuance and redemption of Domestic unsecured nonconvertible corporate bonds
1) Issuance

Amount Interest rate Expiry	2023 $ 11,100,000 1.55%~1.62% 2029`、`2031	2022
		-
		-
		-

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

2) Repayment

Amount	For the years ended December 31,	For the years ended December 31,
	2023 $ 8,850,000	2022
		9,400,000

3) The term of domestic corporate bonds as December 31, 2023 and 2022 were as follows:

Issue amount 2023.12.31 Ending balance 2023.12.31 Current portion 2022.12.31 Ending balance 2022.12.31 Current portion Issuance date Coupon rate Interest payment date Repayment method Issue amount 2023.12.31 Ending balance 2023.12.31 Current portion 2022.12.31 Ending balance 2022.12.31 Current portion Issuance date Coupon rate Interest payment date Repayment method	The first domestic unsecured nonconvertible corporate bond in 2013	The second domestic unsecured nonconvertible corporate bond in 2013	The first domestic unsecured nonconvertible corporate bond in 2014 6,000,000 5,498,450 499,772 5,997,355 499,453 May 21, 2014 1.83%`、`1.92% May 21 Payable in 2 equal installments for each different coupon rate in 2023~2024 and 2025~2026, respectively. The first domestic unsecured nonconvertible corporate bond in 2021 7,500,000 7,492,637 - 7,490,674 - September 15, 2021 0.46%`、`0.52% September 15 Payable in 2 equal installments for each different coupon rate in 2025~2026 and 2027~2028, respectively.	The first domestic unsecured nonconvertible corporate bond in 2017
	11,500,000 - - 749,243 749,243 June 10, 2013 1.23%`、`1.52% June 10 Payable in 2 equal installments for each different coupon rate in 2016~2017 and 2022~2023, respectively. The first domestic unsecured nonconvertible corporate bond in 2018 9,300,000 4,096,047 1,350,000 6,694,400 2,599,671 June 26, 2018 0.82%`、`0.93%`、`1.09% June 26 Payable in 2 equal installments for each different coupon rate in 2022~2023, 2024~2025 and 2027~2028, respectively.	8,500,000 - - 3,148,922 3,148,922 November 8, 2013 1.42%`、`1.94% November 8 Payable in 2 equal installments for each different coupon rate in 2017~2018 and 2022~2023, respectively. The first domestic unsecured nonconvertible corporate bond in 2020		7,000,000 1,849,631 1,849,631 3,698,683 1,849,052 May 19, 2017 1.09%`、`1.32% May 19 Payable in 2 equal installments for each different coupon rate in 2021~2022 and 2023~ 2024 respectively. The first domestic unsecured nonconvertible corporate bond in 2023
		8,350,000 8,343,176 - 8,341,396 - June 22, 2020 0.58%`、`0.63%`、`0.67% June 22 Payable in 2 equal installments for each different coupon rate in 2024~2025, 2026~2027and 2029~2030, respectively.		11,100,000 11,084,248 - - - June 27, 2023 1.55%`、`1.62% June 27 Payable in 2 equal installments for each different coupon rate in 2027~2028 and 2029~2030, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(m) Lease liabilities

Lease liabilities consisted of the following:

Lease liabilities consisted of the following:
Current Non-current financial assets	December 31, 2023 $ 60,234 $ 1,294,833	December 31, 2022
		26,811
		607,619

Please refer to Note 6 (u) the maturity analysis.

On December 31, 2023, the amounts of lease liabilities incurred from the rentals of land increased by $792,872 thousand, with the interest rates of 2.05%, maturing in October 2042. On December 31, 2022, the amounts of lease liabilities incurred from the rentals of land increased by $627,248 thousand, with the interest rates of 1.80% ~ 2.05%, maturing in October 2042. The amount of lease liabilities decreased due to early termination is $93,349 thousand.

The amount recognized in profit or loss was as follows:

Interest on lease liabilities Expenses relating to short-term leases The amount recognized in cash flows statement was as follows: Total cash outflow for leases	December 31, 2023 $ 26,999 $ 107,672 December 31, 2023 $ 206,906	December 31, 2022
		6,431
		101,277
		December 31, 2022
		154,784

The amount recognized in cash flows statement was as follows:

(i) Real estate leases

As of December 31, 2023, the Company leases land and buildings for Ship berthing, loading, unloading, storage and transfer operations. The leases typically run for a period of 2 to 20 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Certain leases provide for additional rent payments that are based on changes in the local price indices, or sales that the Company incurred at the leased store in the period ； others require the Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(ii) Other leases

The Company also leases its buildings with contract terms of one year. These leases are shortterm and the Company has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(n) Employee benefits

(i) Defined benefit plan

The movements in the present value of the defined benefit obligations and fair value of plan assets were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2023 $ 8,451,672 (4,842,502) $ 3,609,170	December 31, 2022 8,805,303 (4,918,437) 3,886,866

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of the plan asset

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company's Bank of Taiwan labor pension reserve account balance amounted to $4,776,892 thousand as of December 31, 2023. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

Defined benefit obligations on January 1 Benefits paid Current service and interest costs Remeasurement of net defined benefit liabilities `－`actuarial losses arising from change in financial assumptions Decrease due to transfer of related party employees Defined benefit obligations on December 31	For the years ended December 31, 2023 2022 $ 8,805,303 9,286,451 (608,965) (596,555) 181,654 129,313 215,002 114,990 (141,322) (128,896) $ 8,451,672 8,805,303
	2023 $ 8,805,303 (608,965) 181,654 215,002 (141,322) $ 8,451,672

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Movements in fair value of defined benefit plan assets

Fair value of plan assets on January 1 Interest income Remeasurement of net defined obligation assets `－`return on plan assets (excluding interest income) Benefits already paid by the plan Contributions from employer Fair value of plan assets on December 31	For the years ended December 31, 2023 2022 $ 4,918,437 3,127,266 61,139 15,500 57,947 258,375 (305,252) (283,754) 110,231 1,801,050 $ 4,842,502 4,918,437
	2023 $ 4,918,437 61,139 57,947 (305,252) 110,231 $ 4,842,502

4) Expense recognized in profit or loss

The pension costs recognized in profit or loss for the years ended 2023 and 2022 were as follows:

Current service costs Interest costs Operating costs Selling expenses Administrative expenses	For the years ended December 31,	For the years ended December 31,
	2023 $ 72,619 47,896 $ 120,515 $ 86,103 3,591 30,821 $ 120,515	2022
		83,293 30,520
		113,813
		80,907 3,251 29,655
		113,813

5) Remeasurement of net defined benefit assets recognized in other comprehensive income

Balance of January 1, Recognized in current period Balance of December 31,	For the years ended December 31, 2023 2022 $ 2,522,465 2,665,850 157,055 (143,385) $ 2,679,520 2,522,465
	2023 $ 2,522,465 157,055 $ 2,679,520

6) Actuarial assumptions

The following are the principal actuarial assumptions as of 2023:

Discount rate Rate of future salary increases	For the years ended December 31,
	2023 2022 % 1.25 % 1.25 % 2.85 % 2.85

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Based on the actuarial report, the Company is expected to make contributions of $116,817 thousand to the defined benefit plans for the one year period after the reporting date.

The weighted average duration of the defined benefit plan is 6.8 years.

7)

Sensitivity analysis

When calculating the present value of the defined benefit obligation, the Company should use judgments and estimates in determining the related actuarial assumptions at balance sheet date, including discount rate, employment turnover rate and future salary increases. Any changes in actuarial assumptions may significantly impact the present value of the defined benefit obligation.

As the year ended of 2023 and 2022, the effects of the present value of the defined benefit obligation arising from changes in principal actuarial assumptions were as follows:

December 31, 2023 Discount rate (change 0.25%) Future salary increases (change 1.00%) December 31, 2022 Discount rate (change 0.25`％`) Future salary increases (change 1.00`％`)	Effect of defined benefit obligations Increase Decrease $ (106,393) 109,695 464,985 (421,270) (124,662) 128,681 539,611 (486,133)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. The sensitivity analysis adopts the same methods for determining the defined benefit assets at balance sheet date.

The same methods and assumptions are adopted in the two-year sensitivity analysis.

(ii) Defined contribution plan

The Company contributes an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act, under which, the Company is not required to bear the regulated or putative obligation subsequent to the payment of fixed-rate contribution.

The Company’ s pension costs under the defined contribution pension plan amounted to $273,642 thousand and $265,095 thousand for the years ended 2023 and 2022, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(o) Income tax

(i) The details of income tax (benefits) expense for the years ended 2023 and 2022 were as follows:

Current income tax (benefits) expenses Deferred tax expenses The origination of temporary differences Income tax (benefits) expenses	For the years ended December 31,	For the years ended December 31,
	2023 $ (525,358) 84,532 $ (440,826)	2022
		5,956,740 483,783
		6,440,523

The amounts of income tax benefits (expenses) recognized in other comprehensive income were as follows:

Items that could not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plan Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements	For the years ended December 31,	For the years ended December 31,
	2023 $ 31,411 $ 173,061	2022
		(28,677)
		(154,405)

The income tax calculated at a statutory income tax rate on accounting income before income tax was reconciled with income tax expense recognized in profit or loss as follows:

Income tax using the Company’s domestic tax rate Effect of tax rates in foreign jurisdiction Tax- exempt income Tax effect on domestic investment income recognized under equity method and Non-deductible expenses Change in provision in prior periods Income tax expense	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,379,377 (2,842) (819,271) (472,732) (525,358) $ (440,826)	2022
		8,516,678 (154,405) (1,688,366) (233,366) (18) 6,440,523

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Recognized deferred tax assets and liabilities

Movements in deferred tax assets and liabilities were as follows:

For the year ended December 31, 2022 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unrealized impairment loss on financial assets Unrealized foreign currency exchange loss Total Deferred tax liabilities Foreign investment income under equity method Cumulative translation adjustment Depreciation Unrealized gross profit Total	Beginning balance	Recognized in income or loss		Recognized in other comprehensive income - - 31,411 - - 31,411 - (173,061) - - (173,061)	Ending balance
	$ - 32,346 855,873 185,895 24,797 $ 1,098,911 $ 19,010,020 285,445 69,812 4,235 $ 19,369,512				2,972 44,901 800,333 151,934 58,334
					1,058,474
					19,035,600 112,384 61,151 -
					19,209,135

For the year ended December 31, 2023 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unrealized impairment loss on financial assets Unrealized foreign currency exchange loss Total Deferred tax liabilities Foreign investment income under equity method Unrealized foreign currency exchange gain Cumulative translation adjustment Depreciation Unrealized gross profit Total	Beginning balance	Recognized in income or loss		Recognized in other comprehensive income - - (28,677) - - (28,677) - 154,405 - - 154,405	Ending balance
	$ 7,826 11,773 1,310,337 220,420 9,699 $ 1,560,055 $ 18,945,319 7,996 131,040 79,436 - $ 19,163,791				- 32,346 855,873 185,895 24,797
					1,098,911
					19,010,020 - 285,445 69,812 4,235
					19,369,512

(iii) The Company’s income tax returns have been examined and approved through 2021 by the ROC tax authorities.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(iv) Global minimum top-up tax

As of December 31, 2023, there have been no legislative or substantive legislative enactments on supplementary taxes in any country where the operations of the are located; hence, no related deferred income taxes have been recognized. Although the retrospective application of － Amendments to IAS 12 "International Tax Reform Pillar Two Model Rules" has no impact on its consolidated financial statements, the Company is closely monitoring the legislative developments related to the introduction of the Global minimum top-up tax in the jurisdictions where it operates.

The Company has applied the deferred tax accounting based on the temporary mandatory relief policy. Due to the impacts of the top-up tax, the income tax incurred by the Company during the year will be recognized as current tax. (see Note 4 (r)).

The Company has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred (see Note 4 (r)).

(p) Capital and other equity

As the year ended of 2023 and 2022, the Company’s government registered total authorized capital and issued capital stock both amounted to $63,657,408 thousand, divided into 6,365,741 thousand shares of stock with $10 par value per share. All issued shares were paid up upon issuance.

(i) Capital surplus

The components of capital surplus were as follows:

The components of capital surplus were as follows:
Paid-in capital in excess of par value Treasury stock transactions Equity in capital surplus of investee companies Overdue unpaid directors’ remuneration and dividends Paid in capital in excess of the par value derived from overseas corporate bond conversion	December 31, 2023 $ 8,130,081 16,263 203,039 482,961 2,997,503 $ 11,829,847	December 31, 2022
		8,130,081 16,263 202,809 450,641 2,997,503
		11,797,297

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Retained earnings

According to the Company’s Articles of Association, the Company’s annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof. In addition, a special reserve shall also be set aside as necessary. The remainder plus the undistributed earnings of the previous years are distributed or left undistributed for business purposes according to the resolution of the stockholders’ dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in the Annual Shareholders’ Meeting.

According to the Company’s Articles of Association, the Board of Directors is authorized to distribute cash dividends by the attendance of at least two-thirds of the directors and the resolution of a majority of the directors attended, and to report the distribution to the Shareholders’ Meeting; the distribution of stock dividends is proposed to the Shareholders’ Meeting for resolution.

The Company's business is a mature industry with table profits each year. The Company also adopts a dividend policy that combines cash dividends, capitalization from earnings, and capitalization from capital surplus. At least 50% of the Company's distributable earnings, after deducting legal reserve and special reserve, should be distributed as cash dividends, with cash dividends as the first priority, and the combined ratio of capitalization from earnings to capital surplus and from capitalization to capital surplus should not exceed 50% of the total dividends. The Company also adopts a dividend distribution policy, under which, net earnings after deducting the legal reserve and special reserve may first be distributed by way of cash dividends which shall be equal to at least fifty percent (50%) of the Company’s total dividend distribution every year. The capitalization of earnings and capital surplus shall not exceed fifty percent of the total dividends.

1) Legal reserve When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.
2) Special reserve

As the Company opted to avail of the exemptions allowed under IFRS 1 “ First-time Adoption of International Financial Reporting Standards” during the Company's firsttime adoption of the IFRS endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) of $2,790,507 thousand under shareholders’ equity were reclassified to retained earnings.When the related assets are used, disposed of, or reclassified, the Company may reverse the appropriation of the special reserve in proportion to the original appropriation. The carrying amount of the special reserve amounted to $2,790,507 thousand as of December 31, 2023 and 2022, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

According to the regulations of the FSC, the Company is also required to set aside an additional special reserve, as part of the distribution of its annual earnings, equal to the difference between the amount of above-mentioned special reserve and net debit balance of the other components of stockholders’ equity, from the current period's profit or loss and the undistributed earnings of the previous period. The amount of debit balance of other stockholders' equity accumulated in prior periods should not be distributed as a special reserve from prior periods' undistributed earnings. If the amount of debit balanceof other stockholders' equity is reversed, the reversed amount may be distributed as earnings.

3) Earnings distribution

The amounts of cash dividends for the 2022 earnings distribution had been approved at the board meeting held on March 10, 2023; while the 2021 earnings distribution had been approved during the shareholders’ meeting on June 9, 2022 as follows:

2022	2022	2022		2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566	2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566	2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566
Dividends per share			Amount	Dividends per share 8.20 Gains (losses) on hedging instruments Re (77,910) - - - - 9,787 (68,123)
$ ounted t fair ue joint	4.20 Exchange differences o translation o foreign financ statements	n f ial	26,736,112
					valuation surplus 1,002,593 - - - - -
					1,002,593	61,068,566

(iii) Other equity (net of tax)

Balance at January 1, 2022 Exchange differences on foreign operations Exchange differences on associates and joint ventures accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Revaluation surplus accounted for using equity method Share of cash flow hedge of associates and joint ventures Balance at December 31, 2022	Exchange differences on translation of foreign financial statements $ (12,738,403) 9,750,931 2,384,119 - - - - $ (603,353)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 94,230,777 - - (30,685,509) (11,906,794) - - 51,638,474	Gains (losses) on hedging instruments 10,962 - - - - - (88,872) (77,910)	Revaluation surplus - - - - - 1,002,593 -	Total 81,503,336 9,750,931 2,384,119 (30,685,509) (11,906,794) 1,002,593 (88,872)
				1,002,593	51,959,804

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(q) Earnings per share

The basic and diluted earnings per share was calculated as follows:

Profit attributable to ordinary shareholders Weighted average number of outstanding ordinary shares (in thousands) Basic earnings per share Profit attributable to ordinary shareholders Weighted average number of outstanding ordinary share (basic) (in thousands) Effect on employee's profit sharing bonus (in thousands) Weighted average number of outstanding ordinary share (diluted) (in thousands) Diluted earnings per share	For the years ended December 31,	For the years ended December 31,
	2023 $ 7,337,709 6,365,741 $ 1.15 $ 7,337,709 6,365,741 229 6,365,970 $ 1.15	2022
		36,142,868
		6,365,741
		5.68
		36,142,868
		6,365,741 921
		6,366,662
		5.68

(r) Revenue from Contracts with Customers

(i) Revenue Segmentation

		For the year	s ended Decemb	er 31, 2023
Plastic division $ 20,019,243 8,763,114 32,525,461 $ 61,307,818 $ 31,881,910 17,101,481 - - - - - - - - - - - - 12,324,427 $ 61,307,818	Polyolefin division 9,477,264 10,586,016 9,283,823 29,347,103 - - 13,002,747 4,262,300 11,830,349 - - - - - - - - - 251,707 29,347,103	Polypropylene division 5,149,501 5,042,078 3,725,832 13,917,411 - - - - - 11,565,645 2,351,766 - - - - - - - - 13,917,411	Tairylan division 5,516,264 5,043,721 9,357,652	Chemistry division 13,016,281 2,219,211 6,188,968 21,424,460 - - - - - - - - - - - 9,057,917 3,497,136 2,781,004 6,088,403 21,424,460	Others divisions 3,807,123 13,200 626,319 4,446,642 - - - - - - - - - - - - - - 4,446,642 4,446,642	Total 56,985,676 31,667,340 61,708,055
			19,917,637			150,361,071
			- - - - - - - 6,252,644 4,659,554 2,934,163 5,529,594 - - - 541,682			31,881,910 17,101,481 13,002,747 4,262,300 11,830,349 11,565,645 2,351,766 6,252,644 4,659,554 2,934,163 5,529,594 9,057,917 3,497,136 2,781,004 23,652,861
			19,917,637			150,361,071

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

		For the year	s ended Decembe	r 31, 2022
Plastic division $ 26,976,726 15,047,958 46,522,834 $ 88,547,518 $ 40,314,826 25,557,163 - - - - - - - - - - - - 22,675,529 $ 88,547,518	Polyolefin division 11,967,519 13,533,210 10,837,600 36,338,329 - - 13,580,368 5,677,864 16,917,863 - - - - - - - - - 162,234 36,338,329	Polypropylene division 6,302,961 6,077,241 3,640,221 16,020,423 - - - - - 12,870,899 3,149,524 - - - - - - - - 16,020,423	Tairylan division 7,772,232 6,470,953 11,629,127 25,872,312 - - - - - - - 8,793,942 6,346,274 4,364,813 5,756,867 - - - 610,416 25,872,312	Chemistry division 17,658,688 1,063,497 5,917,272 24,639,457 - - - - - - - - - - - 8,854,696 2,913,254 5,697,276 7,174,231 24,639,457	Others divisions 3,176,048 11,515 481,229 3,668,792 - - - - - - - - - - - - - - 3,668,792 3,668,792	Total 73,854,174 42,204,374 79,028,283
						195,086,831
						40,314,826 25,557,163 13,580,368 5,677,864 16,917,863 12,870,899 3,149,524 8,793,942 6,346,274 4,364,813 5,756,867 8,854,696 2,913,254 5,697,276 34,291,202
						195,086,831

(ii) Balance of contracts

Notes receivable Accounts receivable (including related parties) Less: allowance for impairment Total Contract liabilities - unearned sales	December 31, 2023 $ 149,200 10,809,581 (77,055) $ 10,881,726 December 31, 2023 $ 1,309,623	December 31, 2022 178,029 12,269,021 (65,229) 12,381,821 December 31, 2022 2,002,962	January 1, 2022 107,109 17,683,274 (64,993) 17,725,390 January 1, 2022 2,038,073

For details on accounts receivable and allowance for impairment, please refer to Note 6(c).

The major change in the balance of the contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

The amounts of revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract liabilities balance at the beginning of the periods were $1,583,891 thousand and $1,090,741 thousand, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(s) Employee bonus

According to the Company’s Articles of Association, once the Company has annual profit, it should appropriate 0.05%~0.5% of the pre-tax net profit before deducting remunerations to employees. However, if the Company has accumulated deficits, an amount should be reserved to offset the deficits.

The remunerations to employees amounted to $8,989 thousand and $55,483 thousand for the years ended December 31, 2023 and 2022, respectively. These amounts were calculated using the Company’ s pre-tax income for each period before deducting the remunerations of employees multiplied by the proposed percentages of remunerations of employees as stated in the Company’s Articles of Association. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholders’ meeting, the adjustments will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

(t) Non-operating income and expenses

(i) Interest income

Interest income from bank deposits Other interest income Total interest income (ii) Other income Rental income Dividends income (iii) Other gains and losses Gains on disposal of property, plant and equipment Foreign currency exchange gains Gains on financial assets at fair value through profit or loss Other gains Other losses Net of other gains and losses	2023 $ 118,838 149,746 $ 268,584 2023 $ 185,729 3,667,671 $ 3,853,400 2023 $ 388,794 140,236 78,878 355,980 (167,196) $ 796,692	2022 24,979 102,179 127,158 2022 188,694 8,441,831 8,630,525 2022 34,240 2,508,771 192,016 502,259 (217,017) 3,020,269
	$ $
	$ $

(iv) Finance costs

Interest expense Less: capitalized interest Interest expense from bank loans Capitalized interest rate	2023 $ 1,491,355 (190,652) $ 1,300,703 1.060%	2022 818,426 (129,230) 689,196 1.060%~1.150%

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(u) Financial instruments

(i) Credit risk
1) Maximum credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk exposure.

2) Concentration of credit risk

The Company’s revenue was not attributable to sales transactions with a single customer or to sales in a specific region. Therefore, accounts receivable have no obvious concentrated credit risk. To reduce credit risk, the Company regularly monitors and reviews the recoverable amount of the trade receivables to its clients, but the company usually doesn’t ask its clients to provide collateral.

3) Credit risk of receivables

For credit risk exposure of receivables, please refer to note 6(c).

(ii) Liquidity risk

The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments but excluding the impact of netting agreements:

agreements:
Carrying amount December 31, 2023 Non-derivative financial liabilities Unsecured bank loans $ 14,491,600 Unsecured Bonds payable (including current portion) 38,364,189 Short-term notes and bills payable 30,663,374 Long-term debts (including current portion) 19,000,000 Accounts payable (including related parties) 8,416,994 Other payables (including related parties) 1,391,822 Other current liabilities 7,243,095 Employees’ savings (record other current liabilities) 192,573 Lease liabilities 1,355,067 $ 121,118,714	Carrying amount	Contractual cash flow	Within 6 months	6~12months	1~2years	2~5years - 15,254,853 - - - - - - 348,182 15,603,035	Over 5 years
		14,612,919 40,140,283 30,750,000 19,607,565 8,416,994 1,391,822 7,243,095 193,969 1,630,389	14,612,919 2,366,785 30,750,000 - 8,416,994 1,391,822 7,243,095 193,969 43,618	- 1,362,555 - 1,535,190 - - - - 43,618	- 7,961,770 - 18,072,375 - - - - 87,236		- 13,194,320 - - - - - - 1,107,735
		123,987,036	65,019,202	2,941,363	26,121,381		14,302,055

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Carrying amount December 31, 2022 Non-derivative financial liabilities Unsecured bank loans $ 14,900,000 Unsecured Bonds payable (including current portion) 36,120,673 Short-term notes and bills payable 19,430,865 Long-term debts (including current portion) 7,500,000 Accounts payable (including related parties) 8,498,428 Other payables (including related parties) 7,396,996 Other current liabilities 8,529,924 Employees’ savings (record other current liabilities) 153,533 Lease liabilities 634,430 $ 103,164,849		Contractual cash flow		Within 6 months		6~12months		1~2years		2~5years - 19,160,278 - - - - - - 157,459 19,317,737	Over 5 years
		15,014,752 37,189,448 19,450,000 7,621,150 8,498,428 7,396,996 8,529,924 154,139 770,073		15,014,752 2,610,660 19,450,000 - 8,498,428 7,396,996 8,529,924 154,139 19,730		- 6,356,080 - 5,062,500 - - - - 19,730		- 5,613,130 - 2,558,650 - - - - 39,460			- 3,449,300 - - - - - - 533,694
		104,624,910		61,674,629		11,438,310		8,211,240			3,982,994

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

(iii) Currency risk

1) Exposure to currency risk

The Company’s exposure to significant foreign currency risk was as follows:

Financial assets: Monetary items USD EUR JPY CNY Financial liabilities Monetary items USD EUR JPY	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2022 Foreign currency (in thousand) Exchange Rate New Taiwan Dollars 60,626 30.7080 1,861,695 3,904 32.7026 127,685 54,235 0.2306 12,507 38 4.4091 168 23,281 30.7080 714,917 194 32.7026 6,355 22,949 0.2306 5,292	December 31, 2022 Foreign currency (in thousand) Exchange Rate New Taiwan Dollars 60,626 30.7080 1,861,695 3,904 32.7026 127,685 54,235 0.2306 12,507 38 4.4091 168 23,281 30.7080 714,917 194 32.7026 6,355 22,949 0.2306 5,292
	Foreign currency (in thousand)	Exchange Rate	New Taiwan Dollars		Exchange Rate New Taiwan Dollars 30.7080 1,861,695 32.7026 127,685 0.2306 12,507 4.4091 168 30.7080 714,917 32.7026 6,355 0.2306 5,292
	$ 280,685 1,603 55,243 636 32,186 1,213 175,520	30.7350 33.9755 0.2172 4.3394 30.7350 33.9755 0.2172	8,626,853 54,463 11,999 2,760 989,237 41,212 38,123	60,626 3,904 54,235 38 23,281 194 22,949

2) Sensitivity analysis

The Company exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, loans and borrowings; and trade and other payables that are denominated in foreign currency.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

A strengthening (weakening) of 1% of the NTD against the USD, EUR, JPY and CNY as of December 31, 2023 and 2022 would have increased (decreased) net profit before tax by $76,275 thousand and $12,755 thousand. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for 2023 and 2022.

3) Foreign exchange gains and losses on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For years 2023 and 2022, foreign exchange gains (losses) (including realized and unrealized portions) amounted to $140,236 thousand and $2,508,771 thousand, respectively.

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is

expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1%, the company’s net income would have decreased or increased by $195,276 thousand and by $224,000 thousand for the year ended December 31, 2023 and 2022, with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at variable rates.

(v) Other market price risk

If the securities price changes at the reporting date (sensitivity analyses were performed using the same basis for both twelve-month period ended December 31, 2023 and 2022, and other factors remain unchanged), impacts on comprehensive income are as below:

Prices of securities at the reporting date	2023	2023	2022	2022
	Other comprehensive income after tax $ 907,394 $ (907,394)	Net income - -	Other comprehensive income after tax 869,482 (869,482)	Net income
Increasing 1% Decreasing 1%				-
				-

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(vi) Fair value

1) Types and fair value of financial instruments

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income (available for sale financial assets ) is measured on a recurring basis.

The carrying amounts and fair values of the Company's financial assets and liabilities, including the information on fair value hierarchy, were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and those equity investments in which the fair value cannot be reliably measured and without any quoted price in the open market, disclosure of fair value information is not required:

	December 31, 2023	December 31, 2023	December 31, 2023
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - 18,308,129 382,492 18,690,621 - - - - 18,690,621	Total
	-	1,641,598		1,641,598
	-	1,641,598		1,641,598
	90,590,581 - - -	- 148,850 - -		90,590,581 148,850 18,308,129 382,492
	90,590,581	148,850		109,430,052
	- - -	- - -		- - -
	-	-		-
	90,590,581	1,790,448		111,071,650

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

	December 31, 2023	December 31, 2023	December 31, 2023
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - - - - - - -	Total
$ 38,364,189 30,663,374 14,491,600 19,000,000 192,573 8,416,994 1,391,822 7,243,095 1,355,067 $ 121,118,714	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

	December 31, 2022	December 31, 2022	December 31, 2022
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - 16,428,859 127,506 16,556,365 - - - - 16,556,365	Total
	-	1,562,720		1,562,720
	-	1,562,720		1,562,720
	86,772,334 - - -	- 175,825 - -		86,772,334 175,825 16,428,859 127,506
	86,772,334	175,825		103,504,524
	- - -	- - -		- - -
	-	-		-
	86,772,334	1,738,545		105,067,244

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

	December 31, 2022	December 31, 2022	December 31, 2022
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - - - - - - -	Total
$ 36,120,673 19,430,865 14,900,000 7,500,000 8,498,428 7,396,996 8,529,924 153,533 634,430 $ 103,164,849	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

2) Valuation techniques for financial instruments not measured at fair value

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Financial liabilities measured at amortized cost.

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value

The fair value of the financial instruments traded in active markets is based on quoted market prices. The fair value of listed equity instruments is based on the market prices that were published at main stock exchanges.

If the financial instruments possessed by the Company have quoted market prices in active markets, the fair value was as follows:

The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes publicly traded stocks).

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Except for financial instruments traded in active market, Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor.

4) There were no transfer between the fair value hierarchy levels for the years ended 2023 and 2022.
5) Movement of financial instruments grouped into level 3

January 1, 2023 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Reclassification December 31, 2023 January 1, 2022 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Reclassification December 31, 2022	Financial assets at fair value through other comprehensive income Unquoted equity instruments Accounts receivable $ 16,428,859 127,506 1,886,118 - (6,848) - - 254,986 $ 18,308,129 382,492 $ 24,749,907 175,365 (8,316,798) - (4,250) - - (47,859) $ 16,428,859 127,506
	Unquoted equity instruments $ 16,428,859 1,886,118 (6,848) - $ 18,308,129 $ 24,749,907 (8,316,798) (4,250) - $ 16,428,859

6) The valuation procedures for fair value measurements being categorized within Level 3 is to ensure the valuation results are reasonable by applying independent information to make the results close to the current market conditions, to confirm whether the resource of information is independent, reliable and in line with other resources, and to represent the independent information as the exercisable price. According to the Company’ s accounting policy, the analysis on the value changes of remeasured or reevaluated assets and liabilities is performed to ensure the reasonability of the evaluation results at the reporting date.
7) The quantitative information of significant unobservable inputs (Level 3)

Most of the Company’ s financial instruments that use Level 3 inputs have only one significant unobservable input, except for equity investment without an active market which have multiple significant unobservable inputs.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income – unquoted equity instruments	Valuation technique Market comparable companies Net Asset Value Method	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability The higher the multiple, the higher the fair value Not applicable Not applicable

8) Valuation model used in Level 3 fair value measurement - sensitivity analysis of the fair value to the reasonable replaceable assumption

The valuation models and assumptions used to measure the fair value of the financial instruments is reasonable. However, the use of different valuation models or assumptions may result in different measurements. The following is the effect of other comprehensive income from financial assets and liabilities categorized within Level 3 when the inputs used to valuation models have changed:

December 31, 2023 Financial assets at fair value through other comprehensive income – unquoted equity instruments December 31, 2022 Financial assets at fair value through other comprehensive income unquoted equity instruments	Input Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	Recognized in other comprehensive income Change Favorable change Unfavorable change ± 1% $ 134,754 (134,754) ± 1% $ 121,366 (121,366)

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(v) Financial risk management

The Company seeks to ensure sufficient cost-efficient funding readily available when needed. The Company manages its exposure to credit risk, liquidity risk and market risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

(i) Framework of risk management

Items	Risk Management Department	Risk Detection
1. Interest rate, exchange rate, and inflation General manager department; accounting department; finance department; and general management department 2.Investments of high risk and leverage, loans to others, guarantees and endorsements, and trade of derivatives General manager department; finance department; and general management department 3.R&D plans General manager department; technology department of each business division; and general management department 4.Changes on significant domestic and international policies and regulations General manager department; manager department and technology department of each business division; legal department; and general management department 5.Changes on technologies General manager department; and manager department of each business division; R&D center; and general management department 6.Changes on corporate imagesGeneral manager department; and manager department of each business division; and general management department 7.Merge and reinvestments General manager department; manager department of each business division; and general management department 8.Expansion of factories General manager department; factory affair department of each business division; manager department; and general management department		Computer audit & regular self audit; monthly budget meeting; finance supervisors meeting; internal audit department; and board meeting Computer audit & regular self audit; monthly budget meeting; finance supervisors meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; R&D meeting; board meeting; and internal audit department Purchases & sales meeting; operation performance meeting; board meeting; and internal audit department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; and board meeting Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Items	Risk Management Department	Risk Detection
9.Centralization of purchases and sales 10.Changes of directors, controllers and major shareholders 11.Changes of management rights 12.Litigation and other affairs 13.Information security	General manager department; manager department of each business division; purchase department; and general management department General manager department; and shares management division of finance department General manager department; and general management department General manager department; general management department; and legal department General manager department; general management department; and general management department	Weekly marker price meeting; purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Operation management meeting and board meeting Operation management meeting and board meeting Purchase & sales meeting, operation performance meeting, internal audit department, and board meeting. Operation management meeting; internal audit department; and board meeting

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from operating activities, primarily trade receivables, and from financing activities, primarily deposits, fixed-income investments and other financial instruments with banks.

1) Accounts receivable and other receivables

To maintain the credit quality of receivables, a credit risk management policy has been established. Under this policy, each customer is analyzed individually regarding customer’ s financial situation, external and internal credit rating, historical trading record, and current economic condition which may affect customer’s payment ability. In addition, some methods are adopted to reduce the credit risk for specific customers, such as prepayment and insurance of accounts receivable.

2) Investments

The Company mainly invests in Petrochemical Industry, which belongs to mature industry with lower risk. In addition, the Company’ s prudent management creates financial health without high-leveraged investment.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Guarantee

The Company’ s endorsement policy is limited to endorsement of subsidiaries or associates with business relationship. The endorsed items are usually related to financing and import duty guarantee. Due to associates’ financial health created by prudent management, management of the Company believes that they are expecting no significant losses from endorsement.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as much as possible, that it will always have sufficient current funds, such as cash and cash equivalent, securities with high liquidity and sufficient credit line from banks, to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Company’s reputation.

(iii) Market risk

Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates and equity prices that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Foreign currency risk

To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Company utilizes derivative financial instruments, including currency forward contracts and cross currency swaps, to hedge its currency exposure. These instruments help to reduce, but do not eliminate, the impact of foreign currency exchange rate movements.

2) Interest rate risk

The Company is exposed to interest rate risk arising from long-term borrowings at floating interest rates. To reduce the risk caused by floating interest rates, the Company utilized interest rate swap contracts to partially hedge its exposure.

(w) Capital management

Although business operated by the Company has reached the stage of maturity, a sufficient amount of capital is still required to support the operation of investee companies, construction and expand its production facilities and equipment.

The Company’s policy is to maintain adequate financial resources and operating plan to meet future operating capital, capital expenditure, research and development expenditure, loans reimbursement, and dividend distribution.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The Company uses debt to capital ratio to manage its capital. The debt to capital ratio is calculated by dividing the net liabilities by the total capital. Net liabilities derived from deducting cash and cash equivalents from total liabilities. Total capital includes common shares of stocks, capital surplus, retained earnings and net liabilities. The Company’s debt to capital ratio at the end of the reporting period was as follows:

Total liabilities Less: cash and cash equivalents Net liabilities Total equity Debt to capital ratio	December 31, 2023 $ 147,521,000 (1,590,917) 145,930,083 347,360,145 % 42.01	December 31, 2022 131,549,347 (8,979,747) 122,569,600 357,684,863 % 34.27

(x) Changes of liabilities arising from financing activities

Changes of liabilities arising from financing activities were as follows:

Short-term borrowings Short-term notes and bills payable Long-term debts (including current portion) Bonds payable (including current portion) Lease liabilities Total liabilities arisings from financing activities	2023.1.1 $ 14,900,000 19,430,865 7,500,000 36,120,673 634,430 $ 78,585,968	Change in cash flows from financing activities (408,400) 11,300,000 11,500,000 2,250,000 (72,235) 24,569,365	Changes in non-cash - (67,491) - (6,484) 792,872 718,897	Effect of exchange rate changes - - - - - -	December 31, 2023
					14,491,600 30,663,374 19,000,000 38,364,189 1,355,067
					103,874,230

Short-term borrowings Short-term notes and bills payable Long-term debts (including current portion) Bonds payable (including current portion) Lease liabilities Total liabilities arisings from financing activities	2022.1.1 $ 4,484,676 2,099,824 - 45,509,254 147,607 $ 52,241,361	Change in cash flows from financing activities 10,415,324 17,350,000 7,500,000 (9,400,000) (47,076) 25,818,248	Changes in non-cash - (18,959) - 11,419 533,899 526,359	Effect of exchange rate changes - - - - - -	December 31, 2022
					14,900,000 19,430,865 7,500,000 36,120,673 634,430
					78,585,968

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(7) Related-party transactions:

(a) Name of related parties

Relationship with Consolidated Company

Name of related party

Formosa Plastics Corp. (Cayman Ltd.) Subsidiary Formosa Industries Corporation Subsidiary Formosa Industries (Hong Kong) Limited Subsidiary Formosa Industries (Ningbo) Co., Ltd. Subsidiary Formosa Petrochemical Corporation Associates Formosa Plastics Corp., U.S.A. Associates Formosa Heavy Industries Corp. Associates Mai Liao Power Corp. Associates Formosa Sumco Technology Corporation Associates Formosa Transportation Corp. Associates Ya Tai Development Corp. Associates Wha Ya Park Management Consulting Corporation Associates Ltd. Formosa Environmental Technology Corporation Associates Formosa Resources Corporation Associates Formosa Group (Cayman) Limited Associates Hua Ya Power Corp. Associates Formosa Plastics Construction Corporation Associates Japan Formosa Sumco Technology Corp. Associates Formosa Automobile Corp. Associates Fujian Fuxin Special Steel Co., Ltd. Associates Formosa Asahi Spandex Co., Ltd. Joint venture Formosa Daikin Advanced Chemical Co., Ltd. Joint venture Formosa Tokuyama Advanced Chemicals Co., Ltd. Joint venture Nan Ya Plastics Corporation Formosa Chemicals and Fiber Corporation Chang Gung Medical Foundation Nan Ya PCB Corporation Nan Chung Petrochemical Corporation PFG Fiber Glass Corporation Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics Corporation America Formosa Industries Corp., Vietnam Formosa Taffeta Co., Ltd.

Associates Associates Associates Associates Associates Associates Associates Associates Joint venture Joint venture Joint venture Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Name of related party

Formosa INEOS Chemicals Corporation Formosa Biomedical Technology Corp. Formosa Carpet Co., Ltd. Formosa Idemitsu Petrochemical Corp. Hong Jing Resources Corp. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Waters Technology Co., Ltd. Formosa Plastics Marine Corp. Formosa Group Ocean Marine Corp. Nan Ya Technology Corporation Inteplast Taiwan Corporation Formosa Ha Tinh (Cayman) Ltd. Formosa Technologies Corporation Formosa Petrochemical Transportation Corporation, Ltd. Chang Gung Biotechnology Corporation Nan Ya Plastics Corporation USA Formosa Ha Tinh Steel Corporation Chang Gung University Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsal Park

Relationship with Consolidated Company

Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

Other related parties Other related parties Other related parties Other related parties Other related parties

(b) Significant related-party transactions

(i) Sales to related parties

Significant sales to related parties and the balance of accounts receivable were as follows:

Sales for the years ended December 31, 2023 2022 $ 7,133,843 10,818,840 10,833,379 14,537,740 384,185 287,674 16,048,022 22,101,447 $ 34,399,429 47,745,701	Accounts receivable –related parties	Accounts receivable –related parties
2023 $ 7,133,843 10,833,379 384,185 16,048,022 $ 34,399,429	December 31, 2023 1,051,441 1,445,900 26,641 1,471,771 3,995,753	December 31, 2022
		815,430 2,038,840 39,250 1,793,888
		4,687,408

The selling prices and collection terms for the sales to related parties are not significantly different from those third-party customers, and receivables are collected on the 27th of the month following the month of sales. The terms of receivables from subsidiaries are O/A 90 days and from other foreign related parties are O/A 60 days or L/C at sight.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Purchase from related parties

Purchases from related parties and the balance of accounts payables were as follows:

Purchases for the years ended December 31, 2023 2022 $ 1,308,181 2,493,193 66,063,456 78,588,953 1,559,307 1,547,139 4,094,647 4,116,617 $ 73,025,591 86,745,902	Accounts payable –related parties	Accounts payable –related parties
2023 $ 1,308,181 66,063,456 1,559,307 4,094,647 $ 73,025,591	December 31, 2023 43,557 4,038,790 10,156 224,072 4,316,575	December 31, 2022
		57,901 5,562,011 8,789 350,017
		5,978,718

The purchase price and payment terms for the purchase from related parties are not significantly different from those with third-party vendors, and payables are paid on the 27th of the month following the month of purchase. The terms of receivables are O/A 90 days for subsidiaries.

(iii) Property transaction
1) Sales of equipment (recognized as property, plant and equipment) to related parties were as follows ：

For the years ended December 31	For the years ended December 31	For the years ended December 31
2023 Disposal price Gain from disposal $ 791,571 410,701	2022
Disposal price $ 791,571	Disposal price -	Gain from disposal
		-

There was no receivable on December 31, 2023.

2) Purchase of equipment (recognized as property, plant and equipment) from related parties and the balance of accounts payable were as follow:

Other related parties	For the years ended December 31, 2023 2022 $ 420,566 1,300,192	Other payables –related parties	Other payables –related parties
	2023 $ 420,566	December 31, 2023 53,788	December 31, 2022
			411

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Acquisition of financial assets

Associates- Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Smart Energy Tech Corporation Subsidiaries Formosa Industries Corporation	Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 79,860 Investments accounted for using equity method 50,000 Investments accounted for using equity method 75,000 Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 1	Transaction Shares For the year ended December 31, 2023 Shares of stock of Formosa Resources Corporation $ 798,600 Shares of stock of Formosa Plastics Construction Corporation 500,000 Shares of stock of Formosa Smart Energy Tech Corporation 750,000 $ 2,048,600 Transaction Shares For the year ended December 31, 2022 Shares of stock of Formosa Industries Corporation $ 2,096,710

(iv) Financing transactions

Financing transactions with related parties were as follows:

Associates Formosa Heavy Industries Corp. Formosa Steel IB Other related parties Formosa Group Ocean Marine Corp.	Due from related parties (recognized as other receivables–related parties)	Due from related parties (recognized as other receivables–related parties)
	December 31, 2023 $ 300,000 1,622,500 567,227 $ 2,489,727	December 31, 2022
		2,900,000 - 2,452,654
		5,352,654

As of December 31, 2023 and 2022, the interest receivable from the abovementioned transactions amounted to $4,294 thousand and $8,166 thousand, respectively, which were recognized as other receivables–related parties.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(v) Endorsements and guarantees

1) The Company’ s endorsements guarantees to secure related parties’ loans were as follows:

Associates Formosa Group (Cayman) Limited	December 31, 2023 $ 7,683,750	December 31, 2022 7,677,000

(vi) Purchases of raw materials on behalf of related parties

The detailed information of buying raw materials on behalf of related parties were as follows:

Subsidiaries	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Other receivables –related parties	Other receivables –related parties
	2023 $ 7,772,459			December 31, 2023 57,417	December 31, 2022
			15,070,674		571,808

(vii) Other transactions

The Company's utility and steam expenses paid to related parties were as follow:

Associates Formosa Petrochemical Corporation	Other payables–related parties	Other payables–related parties
	December 31, 2023 $ 1,130,642	December 31, 2022 1,821,789

(viii) Receivables from payment on behalf of related parties

The Company paid for construction design service fees on behalf of related parties as follows:

Associates Fujian Fuxin Special Steel Corp., Ltd	Other receivables `－`related parties	Other receivables `－`related parties
	December 31, 2023 $ 1,316,734	December 31, 2022
		1,590,609

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ix) Rental (recognized as other income)

The Company lease its office and building to related parties, and derived rental income thereon as follows:

Associates Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Others Joint ventures Formosa Daikin Advanced Chemical Co., Ltd. Others Other related parties Nan Ya Plastics Corporation Others	For the years ended December 31,	For the years ended December 31,
	2023 $ 14,016 57,801 11,877 21,490 9,189 21,974 14,870 $ 151,217	2022
		16,568 58,221 34,634 17,397 8,625 20,817 14,371
		170,633

The rentals charged to related parties are determined based on the local market prices, and rents are collected depending on the contract periods (e.g. monthly, semi-annually or annually).

(c) Compensation of key management

The compensation to key management was as follows:

Short-term employee benefits	For the years ended December 31,	For the years ended December 31,
	2023 $ 55,568	2022
		69,758

(8) Pledged assets:

The Company’s assets pledged to secure loans were as follows:

Classification of assets Nature of Pledged Assets Property, plant and equipment land and building Refundable deposits (recognized as non-current assets) Certificate of deposit	December 31, 2023 $ 2,151,901 111,986 $ 2,263,887	December 31, 2022
		2,153,375 108,699
		2,262,074

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(9) Commitments and contingencies:

(a) The amounts of endorsements and guarantees for related parties were as follows:

Endorsements and guarantees	December 31, 2023 $ 7,683,750	December 31, 2022
		7,677,000

(b) The amounts of unused outstanding letters of credit for the importation of raw materials for related parties were as follows:

Unused outstanding letters	December 31, 2023 $ 283,422	December 31, 2022
		342,113

(c) (i) As of December 31, 2023, the Company’ s investee, Formosa Ha Tinh (Cayman) Ltd. and Formosa Ha Tinh Steel Corporation, signed several contracts of syndicated credit lines with different banks amounting of US$4,848,500 thousand and US$2,453,500 thousand for its operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking and to manage the necessary funds to fulfill the repayment of obligations when needed.
(ii) As of December 31, 2023, Formosa Steel IB Pty Ltd., a subsidiary of the Company’ s investee, Formosa Resources Corporation, signed several contracts of syndicated credit lines with different banks amounting to USD 695,000 thousand for its operational needs. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Steel IB Pty Ltd. to ensure that it completes its financial obligation.
(iii) As of December 31, 2023, the Company' s investee, Formosa Resources Corporation, signed several contracts of syndicated credit lines with different bank amounting of USD 430,000 thousand for its operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Resources Corporation to ensure that it completes its financial obligation.
(iv) As of December 31, 2023, Formosa Resources Australia Pty Ltd., the subsidiaries of the Company' s investee Formosa Resources Corporation' s , signed several contracts of syndicated credit lines with different bank amounting to USD 550,000 thousand for its operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Resources Australia Pty Ltd. to ensure that it completes its financial obligation.

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

(a) The Company resolved in its board meeting held on January 22, 2024 to purchase 50% equity interest of Taiwan Tokuyama Corporation, a wholly-owned subsidiary of Japan Tokuyama Corporation, with the initial purchase price of $574,081 thousand, wherein the total consideration (capped at $1,100,000 thousand) will be subject to reevaluation following the auditor's report of Taiwan Tokuyama Corporation for the year ended December 31, 2025.
(b) Fujian Fuxin Special Steel Co., Ltd, an investee of the Company in mainland China, conducted a cash capital increase, at the amount of USD 1,450,000 thousand, in order to repay its loans and improve its financial structure, in which the Company participated by investing the amount of USD 530,000 thousand through a third-party entity, Sky Dragon Investment Limited(Samoa), based on a resolution decided during its board meeting held on March 6, 2024, resulting in the Company's cumulative investment to increase to USD 955,800, thousand, representing 32.84% of its subsidiary’ s capital of USD 2,910,000 thousand.

(12) Other:

(a) The nature of operating costs and expenses of the Company were as follows:

	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022
	Operating costs	Operating expenses	Non- operating expenses	Total	Operating costs	Operating expenses	Non- operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	4,964,819 370,725 248,834 - 135,151 4,010,458 254,468	4,238,599 262,313 145,323 9,610 77,633 398,277 -	- - - - - - 27,884	9,203,418 633,038 394,157 9,610 212,784 4,408,735 282,352	5,228,735 366,521 239,859 - 165,393 3,764,422 254,742	4,534,933 264,465 139,049 9,720 96,011 346,696 -	- - - - - - 11,418	9,763,668 630,986 378,908 9,720 261,404 4,111,118 266,160
The Company's number of employees and additional information on employee benefits were as follows: 2023 2022 Number of employees 6,770 6,820 Number of directors who were not employees 11 11 The average employee benefit $ 1,545 1,621 The average salaries and wages $ 1,362 1,434 Adjustment of the average salaries and wages % (5.02) % 12.38 Remuneration of supervisors $ - -

(Continued)

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(i) Policy for directors’ remuneration:

1) The Company's independent directors will receive the remuneration monthly, and they are also provided with transportation allowances based on their board meeting attendance. However, no variable remuneration was paid by the Company.
2) According to the Company's articles, the directors’ remuneration is approved by the board of directors in accordance with the degree of participation and value of contributions of each director to the operation of the Company, as well as the salary standards of the same peer or industry. Also, they are provided with transportation allowances based on their board meeting attendance. However, no variable remuneration was paid by the Company
3) On June 5, 2009, the Company had approved to abolish the appropriation earnings for directors and supervisors as remuneration at the annual stockholders’ meeting.
(ii) Policy for remuneration to supervisors:

On June 25, 2015, the Company has established an Audit Committee to replace its supervisors.

(iii) Policy for managers’ remuneration:

According to the Company’ s articles and Article 29 of the R.O.C. Company Act, the Company’s managers will receive a monthly remuneration, annual bonus,performance bonus and managers’ bonus. Also, The Company monthly allocates retirement pension (including both old and new) and welfare payments to their personal accounts in accordance with the provisions of the Company's Pension. Furthermore, an additional remuneration will be provided to managers under exceptional situations, such as executive retirement bonuses, severance payment, etc. Also, a fixed monthly remuneration will be adjusted based on the annual standard adjustment for general employees. Besides, the chairman of the board of directors will propose the adjustment to the remuneration committee after considering and evaluating the overall performance of the manager's responsibilities (including operational effectiveness, financial performance, industrial safety incidents, environmental sustainability, energy saving, etc.) as well as the achievement of the individual's "annual work target".

(iv) Policy for employee remuneration:

The Company's employees are paid monthly. They will also receive their annual bonus, festival bonus, performance bonus and managers’ bonus, depending on the business condition of the Company.Besides, the monthly wages are adjusted with reference to the Consumer Price Index (CPI), industry salary level, and relevant economic data.

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the years ended December 31, 2023:

(i) Fund financing to other parties (the amounts expressed in CNY are in thousands):

(In Thousands of New Taiwan Dollars)

No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Colla	teral	Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Value
0 0 0 0 0 0 0 0 1 1 2 2	The Company The Company The Company The Company The Company The Company The Company The Company Formosa Industries(Ning bo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd. Formosa Electronic (Ningbo) Co., Ltd.	Formosa Petrochemical Corp. Formosa Chemicals & Fiber Corp. Nan Ya Plastic Corp. Formosa Heavy Industries Corp. Formosa Sumco Technology Corporation Formosa Steel IB Formosa Group Ocean Marine Corp. Japan Formosa Sumco Technology Corp. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Heavy Industries (Ningbo) Corp. Formosa Heavy Industries (Ningbo) Corp. Formosa Industries (Ningbo)Co., Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	8,500,000 8,500,000 8,500,000 8,400,000 6,000,000 1,700,000 3,754,862 540,000 1,061,319 (CNY244,600) 17,577,289 (CNY4,051,000) 251,662 (CNY58,000) 303,730 (CNY 70,000)	4,500,000 4,500,000 4,500,000 6,000,000 - 1,622,500 657,227 - 433,900 (CNY100,000) 14,513,955 (CNY3,345,000) 251,662 (CNY58,000) 303,730 (CNY 70,000)	- - - 300,000 - 1,622,500 567,227 - 433,900 (CNY100,000) 14,513,955 (CNY3,345,000 ) 251,662 (CNY58,000) 303,730 (CNY 70,000)	1.994% 1.994% 1.994% 1.864% ~ 1.994% 1.994% 1.994% 1.864% ~ 1.994% 1% 2.760% ~ 2.960% 2.760% ~ 2.960% 2.760%~ 2.920% 2.760%	2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - -	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - - 173,578 - - -	- - - - - - - - - - - -	- - - - - - - - - - - -	69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 21,329,179 21,329,179 267,087 333,859	138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 53,322,946 53,322,946 667,718 667,718	Note 4 Note 4 Note 4 Note 4

Note 1: (1) Those with business contact please fill in 1

(2) Those necessary for short-term financing please fill in 2.

Note 2: (1) Capital loaned to other parties should not exceed 50% of the lender’s net worth, of which the sum loaned to non-interested parties for capital requirements should not exceed 40% of the net worth of borrower.

(2) The cap amount of loans to associates and interested parties should not exceed 25% of the equity of the lenders. Other parties should not exceed 20% of the lender’s net worth.

(3)Subsidiaries’ capital loaned to associates and interested parties should not exceed 50% of the equity of the lenders. Other parties should not exceed 40% of the lender’s net worth. However, subsidiaries' capital loaned to the parties located in non-Taiwan and directly or indirectly held by the company 100% of the shares should not exceed 50% of the lender' s net worth. However, subsidiaries' capital loaned to the parties located in nonTaiwan and directly or indirectly held by the company 100% of the shares should not exceed 50% of the lender' s net worth.

(4) The subsidiaries’ cap amount of loans to other parties should not exceed 100% of its equity. Non-intereseted parties should not exceed 40% of its net worth. However, subsidiaries’ capital loaned to the parties located in non-Taiwan and directly or indirectly held by the company 100% of the shares are not limited.

Note 3: The ending balance was approved by the Board of Directors.

Note 4: The exchange rate of New Taiwan dollars to CNY dollars was 4.339 to 1.

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(ii) Guarantees and endorsements for other parties:

									(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	Formosa Group (Cayman) Limited	6	225,784,095	8,104,750	7,683,750	7,683,750	-	% 2.21	451,568,189	N	N	N

Note 1: The guarantees and endorsements of the Company and its subsidiaries were listed in the form of numbers with the rules below:

(1) The Company is represented by 0.
(2) The subsidiaries are represented numerically starting from 1.

Note 2: There are seven conditions in which the Company may have guarantees or endorsements for other parties as follows:

(1) The Company has business relationship.

(2) The Company holds directly and indirectly more than 50% of the voting shares of the subsidiaries.

(3) In aggregate, the Company holds directly or its subsidiaries hold indirectly more than 50% of the investee.

(4) Subsidiaries in which the Company holds directly or indirectly more than 90% of the voting shares make endorsement and guarantees for each other.

(5) The Company is required to provide guarantees or endorsements for the construction project based on the construction contract.

(6) The stockholders of the Company provide guarantees or endorsements for the investee in proportion to their stockholding percentage.

(7) According to Consumer Protection Act, companies are required to provide guarantees and endorsements for joint and several liability if take part in business of preconstruction real estate.

Note 3: The total amount of guarantees and endorsements by the Company shall not exceed 1.3 times of the Company’s net asset, and the amount of guarantees and endorsements for a specific enterprise shall not exceed 50% of the aforementioned total amount

(iii) Information regarding securities held at the reporting date (subsidiaries, associates and joint ventures not included):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company The Company The Company The Company The Company The Company The Company	Asian Pacific Investment Corp. Mai-Liao Harbor Administration Corp. Taiwan Aerospace Corp. Chinese Television System Inc. China Investment & Development Co., Ltd. Formosa Plastics Development Corp. Xiangho Aircraft Leasing Corp.	Other related parties - - - - - -	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current	68,743 39,574 1,103 1,769 1,287 20,471 2,071	2,335,200 1,147,440 29,505 67,336 11,628 257,935 -	% 16.17 % 17.99 % 0.81 % 1.05 % 0.80 % 18.00 % 9.55	2,335,200 1,147,440 29,505 67,336 11,628 257,935 -

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Formosa Plastics Corp. (Cayman Ltd)	Formosa Petrochemical Transportation Corporation, Ltd. Formosa Technologies Corporation Formosa Plastics Marine Corp. Formosa Group Ocean Investment Corp. Formosa Plastics Maritime Corp. Guangyuan Investment Corp. Central Leasing International Corp. Inteplast Taiwan Corporation Mega Growth Venture Capital Co., Ltd. Minima Technology Co., Ltd. Formosa Ha Tinh (Cayman) Limited Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Nan Ya Technology Corp. Puriblood medical Co,.Ltd Mega Prosperity Private Placement Fund Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	- Other related parties Other related parties - - - - Other related parties - - - Other related parties Other related parties Other related parties -	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income- non-current	2,642 2,925 11,657 3 354 3,750 2,373 2,160 1,390 7,405 621,178 783,357 198,744 334,815 1,300 4,554 -	96,758 265,371 501,865 6,307,880 190,447 31,275 - 54,810 11,039 126,551 6,873,089 18,308,129 52,093,232 12,381,747 26,115,602 148,850 90,739,431 1,641,598 100,861	% 12.00 % 12.50 % 15.00 % 19.00 % 18.11 % 3.91 % 1.43 % 18.00 % 1.97 % 18.81 % 11.43 % 9.88 % 3.39 % 10.81 % 9.14 - % 16.11	96,758 265,371 501,865 6,307,880 190,447 31,275 - 54,810 11,039 126,551 6,873,089 18,308,129 52,093,232 12,381,747 26,115,602 148,850 90,739,431 1,641,598 100,861

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
The Company The Company The Company	Securities - Formosa Smart Energy Tech Corporation Securities - Formosa Plastics Construction Corporation Securities- Formosa Resources Corporation	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method	Formosa Smart Energy Tech Corporation Formosa Plastics Construction Corporation Formosa Resources Corporation	Associates Associates Associates	100,000 60,000 830,047	1,000,818 578,907 8,358,827	75,000 50,000 79,860	750,000 500,000 798,600	- - -	- - -	- - -	- - -	175,000 110,000 909,907	1,733,910 (Note 1) 1,051,647 (Note 2) 7,714,128 (Note 3)

Note 1 : The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(16,908) thousand.

Note 2: The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(7,719) thousand and other of $(19,541) thousand.

Note 3: The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(766,156) thousand and accumulated translation adjustment of $(677,143) thousand.

(v) Acquisition of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock: None
(vi) Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Collection status	Gain from disposal	Counter- party	Nature of relationship	Purpose of disposal	Price reference	Other terms
The Company	Land and Building	2023.03.10	2007.01.30	380,870	791,571	Collected in full	410,701	Formosa Sumco Technology Corporation	Associates	Disposal of idle land	Valuation Report

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of $100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts	receivable (payable)	Note
			Purchases/Sales	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Taffeta Co. Ltd.	Other related parties `〃` Associates Associates Joint venture Other related parties	(Sales) `〃` `〃` `〃` `〃` `〃`	(9,612,342) (3,959,026) (7,004,036) (110,891) (259,856) (179,834)	% 6.39 % 2.63 % 4.66 % 0.07 % 0.17 % 0.12	Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month	- - - - - -		779,662 286,587 387,859 3,524 15,688 8,332	7.16% 2.63% 3.56% 0.03% 0.14% 0.08%

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchases/Sales	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries U.S.A Co. Ltd The Company The Company The Company The Company	Inteplast Taiwan Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Industries (Ningbo) Co., Ltd. Formosa SumcoTechnolo gyCorporation Formosa Plastics Corp., U.S.A. The Company Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Inteplast Group Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Heavy Industries Corp.	Other related parties `〃` Other related parties Parent- subsidiary Associates Associates Parent- subsidiary Other related parties `〃` Other related parties Other related parties Other related parties `〃` Associates `〃`	(Sales) `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Purchases `〃` `〃` `〃`	(199,518) (1,420,194) (220,050) (7,133,843) (125,548) (3,530,312) (966,553) (795,817) (159,216) (405,905) (1,373,065) 1,239,682 2,658,645 66,063,456 1,429,796	% 0.13 % 0.94 % 0.15 % 4.74 % 0.08 % 2.35 % 2.11 % 1.74 % 0.35 % 0.89 % 12.54 % 1.07 % 2.30 % 57.15 % 1.24	Before the 27th of the following month O/A 60 days O/A 60 days O/A 90 days O/A 90 days O/A 90 days Before the 30th of the following month Before the 30th of the following month Before the 30th of the following month Before the 30th of the following month Before the 10th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month	- - - - - - - - - - - - - - -		17,636 318,384 28,625 1,051,441 8,837 1,041,843 20,022 76,125 15,579 37,845 94,302 (72,623) (129,235) (4,038,790) -	0.16% 2.93% 0.26% 9.66% 0.08% 9.57% 0.56% 2.13% 0.44% 1.06% 10.71% 0.86% 1.54% 47.98% -%

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable	Notes/Accounts receivable (payable	) Note
			Purchases/Sales	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company FormosaIndustri es(Ningbo) Co., Ltd. Formosa Industries U.S.A Co. Ltd.	FormosaINEOS ChemicalsCorp oration FormosaIndustri es(Ningbo) Co., Ltd. The Company Formosa Plastics U.S.A Co. Ltd.	Other relatedparties Parent- subsidiary `〃` Associates	Purchases `〃` `〃` Purchases	144,267 966,553 14,906,312 8,040,094	% 0.12 % 0.84 % 37.17 % 91.69	Before the 90th of the following month Before the 30th of the following month O/A 90 days Before the 10th of the following month	- - - -		(12,406) 20,022 1,108,858 517,512	0.15% 0.24% 34.98% 78.09%	Note

Note ： Including the purchases of raw materials on behalf of related parties.

(viii) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Ove	rdue	Amounts received in subsequent period	Allowance for bad debts	Note
					Amount	Action taken
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd.	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Formosa Group Ocean Marine Corp. Fujian Fuxin Special Steel Co., Ltd Formosa Steel IB Formosa Mitsui Advanced Chemical (Ningbo) Co., Ltd. Formosa Heavy Industries(Ningbo) Corp. Formosa Heavy Industries(Ningbo) Corp. Formosa Industries (Ningbo) Co., Ltd.	Other related parties `〃` Associates Other related parties Parent-subsidiary Associates `〃` Other related parties Associates `〃` Joint ventures Associates `〃` `〃`	779,662 286,587 387,859 318,384 1,051,441 1,041,843 300,000 567,227 1,316,734 1,622,500 433,900 14,513,955 251,662 303,730	10.87 11.46 14.57 5.01 7.64 2.84 - - - - - - - -	- - - - - - - - - - - - - -		779,662 286,587 387,859 318,384 1,051,441 1,041,843 - - - - - - - -	- - - - - - - - - - - - - -

(ix) Trading in derivative instruments: None.

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(b) Information on investees:

The followings are the information on investees for the year ended December 31, 2023 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance	as of Decembe	r 31, 2023	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares (thousands)	Ownership	Carrying value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Formosa Plastics Corp. (Cayman Ltd.) Formosa Industries Corporation Formosa Industries Corporation	Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment Limited Formosa Plastics Corp. (Cayman Ltd.) Mai Liao Power Corp. Formosa Sumco Technology Corp. Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Asahi Spandex Co., Ltd. Formosa Automobile Corporation Hwa Ya Technology Park Management Consulting Corporation Formosa Daikin Advanced Chemical Co., Ltd. Formosa Resources Corporation Formosa Environmental Technology Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Industries Corporation Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Smart Energy Tech Corporation Formosa Industries (Hong Kong) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C.	Taiwan U.S.A Taiwan Samoa Cayman Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman U.S.A Taiwan Taiwan Hong Kong U.S.A U.S.A	Petrochemicals Chemicals Mechanical equipment Investment Investment Electricity Electronics manufacture Transportation Transportation Construction Development of land Artificial fiber Automobile Service business Chemical industry Mining industry Environmental industry Construction Investment Chemicals Semiconductor Battery green energy Reinvestment Olefins Transportation	30,144,951 5,614,024 2,498,463 13,221,416 27,347,136 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000 9,099,071 417,145 1,100,000 377 17,736,955 500,000 1,750,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	30,144,951 5,614,024 2,498,463 13,221,416 27,347,136 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000 8,300,471 417,145 600,000 377 17,736,955 500,000 1,000,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	2,720,549 70 661,458 425,800 78 764,201 112,708 6,566 4,698 1,200 1,306 50 27,044 33 24 909,907 41,714 110,000 13 6 50,000 175,000 - - -	% 28.56 % 22.66 % 32.92 % 50.00 % 100.00 % 24.94 % 29.06 % 33.33 % 33.33 % 28.72 % 45.04 % 50.00 % 45.00 % 33.00 % 50.00 % 25.00 % 24.34 % 33.33 % 25.00 % 100.00 % 50.00 % 25.00 % 100.00 % 33.00 % 38.00	95,893,554 76,598,468 6,664,662 631,603 53,929,869 13,805,045 7,395,360 1,237,189 5,572 19,651 19,646 979,254 390,857 4,299 1,336,390 7,714,129 234,961 1,051,647 835,318 11,536,884 229,284 1,733,910 53,996,224 (USD1,756,832) 5,746,602 (USD186,973) 9,685 (USD315)	21,888,842 6,217,686 (1,846,402) (4,978,537) 142,111 12,446,276 3,458,841 88,989 (41,380) (55) (35) (88,863) 170,150 388 (17,684) (3,064,624) 12,839 (23,157) 274,623 (2,418,167) (216,902) (67,630) 321,649 (USD10,316) 1,395,121 (USD44,747) 25,185 (USD808)	6,234,378 1,205,482 (617,732) (2,489,269) 142,111 3,104,370 1,005,129 29,662 (13,791) (16) (16) (44,431) 76,565 128 (8,842) (766,156) 3,126 (7,719) 68,656 (2,418,167) (108,450) (16,908) 321,649 (USD10,316) 460,389 (USD14,767) 9,570 (USD307)	Note1, Note 2 Note1, Note 2 Note1, Note 2 Note1, Note 2 Note, Note 1 Note1, Note 2 Note1, Note 2 Note1, Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note1, Note 2 Note1, Note 2 Note 2 Note1, Note 2 Note 1 Note 2 Note 2 Note 1, Note 3 Note, Note 2, Note 3 Note, Note 2, Note 3

Note1 ： Including cumulative translation adjustments.

Note 2 ： Long-term equity investments under equity method.

Note 3 ： The exchange rate of New Taiwan dollars to US dollars on December 31, 2023 is 30.7350 to 1.

The average exchange rate of New Taiwan dollars to US dollars for the years ended December 31, 2023, is 31.1782 to 1.

(Continued)

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(c) Information on investment in mainland China:
(i) Names of investees in Mainland China, major operations, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Major operations	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January1, 2023	Invest flo	ment ws	Accumulated outflow of investment from Taiwan as of December 31, 2023	Net income (losses) of the investee	Percentage of ownership	Investment income (loss) recognized	Carrying value as of December 31, 2023	Accumulated inward remittance of earnings as of December 31, 2023
					Outflow	Inflow
Formosa Industries (Ningbo) Co., Ltd.(Note 2) Formosa Electronic (Ningbo) Co., Ltd. (Note 2) Formosa Mitsui Advanced Chemical Co., Ltd. Fujian Fuxin Special Steel Co., Ltd Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	Plastics Electronics Electrolyte Steel Carbon fiber	31,188,509 (USD989,023) 74,648 (USD2,260) 501,096 (USD17,400) 34,347,344 (USD1,460,000) 616,986 (USD19,000)	(2) (2) (2) (2) (2)	26,928,755 (USD845,270) 66,137 (USD2,000) 250,548 (USD8,700) 13,221,416 (USD425,800) 99,993 (USD3,060)	- - - - -	- - - - -	26,928,755 (USD845,270) 66,137 (USD2,000) 250,548 (USD8,700) 13,221,416 (USD425,800) 99,993 (USD3,060)	228,116 (USD7,317) 93,533 (USD3,000) (358,721) (USD-11,506) (8,535,302) (USD-273,759) (82,357) (USD-2,642)	100.00% 100.00% 50.00% 29.16% 16.11%	228,116 (USD7,317) 93,533 (USD3,000) (179,361) (USD-5,753) (2,489,268) (USD-79,840) -	53,328,437 (USD1,735,105) 667,787 (USD21,727) - (USD-) 631,147 (USD20,535) 100,861 (USD3,282)	- - - - -

Note1 ： Investment methods are classified into the following three categories.

(1) Direct investment in Mainland China.

(2) Indirect investment in Mainland China through a third-region company.

(3) Others.

Note 2 ： The amounts of the transactions and the ending balances have been offset in the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated investment in Mainland China as of December 31, 2023	Investment amounts authorized by Investment Commission, MOEA (Note1)	Upper limit on investment (Note 2)
40,566,849 (USD1,284,830)	43,915,490 (USD1,428,843)	-

Note: The exchange rate of New Taiwan dollars to US dollars on December 31, 2023, is 30.735 to 1.

Note 1: Includes USD 144,013 thousand approved capital increase out of retained earnings.

Note 2: The Industrial Development Bureau of the MOEA issued a letter to the Company stating that it qualifies under Section 12 of the Statute for Upgrading Industries.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chang Gung Medical Foundation	601,011,035	% 9.44
Formosa Chemicals and Fiber Corporation	486,978,694	% 7.64
The business department of Standard Chartered International Commercial Bank entrusted with the custody of Credit Suisse AG-Credit Suisse Singapore Branch investment account	398,731,554	% 6.26

(i) The information of major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, is calculated based on the shareholders holding more than 5% of the Company’s common shares that have been issued without physical registration. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration due to different bases of preparation and calculation.
(ii) Where the stocks are entrusted by shareholders, information is disclosed by the individual account of settlor who has segregated trust accounts opened by trustees. As for shareholders filing shareholdings of insiders with 10% or more of the Corporation’s stocks pursuant to the securities and exchange laws and regulations, the number of stocks owned shall be ones owned by the persons plus ones entrusted where the shareholders have the power to decide how to utilize the trust property. Please access the Market Observation Post System website for information on insiders’ shareholding filings.

(14) Segment information:

Please refer to the consolidated financial statements in 2023.

(Continued)

Formosa Plastics Corporation

List of Cash and Cash Equivalents

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items	Description	Amount
Cash on hand	$	162
Petty cash		200
Bank deposit	Checking account	77,576
	Demand account	180,783
	USD 21,896 thousand	672,973
	JPY 55,243 thousand	11,999
	EUR 63 thousand	2,143
	CNY 636 thousand	2,759
		948,233
Cash equivalents	Time deposits-NTD	642,322
	$	1,590,917
Note: Exchange rate on December 31, 2023 USD 1.00=NTD 30.7350
	JPY 1.00=NTD 0.2172
	EUR 1.00=NTD 33.9755
	CNY 1.00=NTD 4.3394

Formosa Plastics Corporation

List of Assets Designated at FVTPL - Current

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name of financial assets Private equity of Mega International Commercial Bank Co. Ltd	Description Funds	Shares/Units 4,554	Face value $ 328.34	Total amount 1,495,338	Cost 1,495,338	Fai	r value Total amount Note 1,641,598 -
						Unit price 360.47

Formosa Plastics Corporation

List of Assets Measured at Fair Value Through Other Comprehensive Income - Current

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name of financial assets Nan Ya Plastics Corporation Formosa Chemicals and Fiber Corporation Nan Ya Technology Corporation Puriblood Medical Co.,Ltd	Description Stocks Stocks Stocks Stocks	Shares/ Units 783,357 198,744 334,815 1,300	Face value Total amount $ 10 7,833,570 10 1,987,440 10 3,348,150 10 13,000 $ 13,182,160	Cost 16,930,051 1,775,505 10,215,315 91,000 29,011,871	Fair	value Total amount Note 52,093,232 - 12,381,747 - 26,115,602 - 148,850 - 90,739,431
					Unit price 66.50 62.30 78.00 114.50

Formosa Plastics Corporation

Statement of notes receivable

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

		Amount
FSSC	$	8,112
TWYK		2,774
YCCYQ		11,614
SUNWEL		97,751
TMSY		8,870
YCCY14		3,918
Others(Note)		16,161
Total	$	149,200

Note: Items that do not reach the five percent benchmark for this account.

Statement of trade receivables

Items	Description		Amount
AUVI	General Customer	$	1,061,576
Others(Note)	"		5,752,253
Less:allowance for impairment	"		(77,055)
Total		$	6,736,774
Formosa Industries(Ningbo) Co., Ltd.	Related Parties	$	1,051,441
Nan Ya Plastics Corporation	"		779,662
Others(Note)	"		2,164,649
Total		$	3,995,752
Note: Items that do not reach the five percent benchmark for this account.

Formosa Plastics Corporation

List of Other Current Assets and Other Receivables

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Prepaid expense Prepaid material expense Payment on behalf of others Other current assets Other receivables	Description Amount Insurance $ 36,925 Construction Materials 935,276 Others 777,026 1,749,227 Materials from third party 1,174,660 65,574 $ 2,989,461 Interest $ 62,854 Materials 498,305 Sales tax and Tax refund of sales tax 1,156,360 Allocation of common expense 63,276 Payment on behalf of related parties 4,338 Rent 8,277 Others 31,853 $ 1,825,263

Formosa Plastics Corporation

List of Inventory

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Raw materials Supplies Work in process Finished goods Machinery and accessories in process Less : allowance to reduce inventory to NRV Total	Amount Cost NRV Annotations $ 1,568,531 1,567,923 NRV 762,582 233,507 `″` 1,108,517 1,089,469 `″` 9,991,145 9,569,378 `″` 1,512,904 1,512,904 `″` 14,943,679 13,973,181 (970,498) $ 13,973,181
	Cost $ 1,568,531 762,582 1,108,517 9,991,145 1,512,904 14,943,679 (970,498) $ 13,973,181

Formosa Plastics Corporation

Changes in Investments Using Equity Method

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investments Limited Formosa Plastics Corp. (Cayman Ltd) Mai Liao Power Corp. Formosa Sumco Technology Corporation Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Asahi Spandex Co., Ltd. Formosa Automobile Corporation Wha Ya Park Management Consulting Corporation Ltd Formosa Daikin Advanced Chemical Co., Ltd. Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Plastics International (Cayman) Limited Japan Tokuyama Co., Ltd. Formosa Industries Corp.,U.S.A Formosa Smart Energy Tech Corporation Total Cumulative translation adjustments Long-term investment using equity method, net	January, 1	January, 1	Acquisition Shares Amount - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 79,860 798,600 50,000 500,000 - - - - - - - - 75,000 750,000 2,048,600 - 2,048,600	Disposal Shares Amount - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	Equity method Share profit Share loss 6,234,378 - 1,205,482 - - 617,732 - 2,489,269 142,111 - 3,104,370 - 1,005,129 - 29,662 - - 13,791 - 16 - 16 - 44,431 76,565 - 128 - - 8,842 3,126 - - 766,156 - 7,719 68,656 - - - - 108,450 - 2,418,167 - 16,908 11,869,607 6,491,497 - - 11,869,607 6,491,497	Dividends from investees Share dividends (shares) Cash dividends - 2,992,604 - - - - - - - - - - - 822,766 - - - - - - - - - 245,993 - 196,287 - - - - - - - - - - - - - - - - - - - - 4,257,650 - 4,257,650	Others (Note2) Shares Amount - 3,623,477 - 167,004 - 130,898 - - - (70,612) - 933,339 - 2,773 - 892 - (3,462) - - - - - 8,434 - 1,588 - 31 - (158) - 104 - - - (19,541) - - - - - - - - - - 4,774,767 (1,494,243) 3,280,524		December, 31	Amount 95,761,035 75,124,941 6,883,224 859,293 54,620,881 13,924,880 7,414,559 1,259,663 5,572 19,651 19,646 979,254 390,857 4,299 1,336,390 235,016 7,334,166 1,051,647 851,921 - 229,284 11,338,814 1,733,910 281,378,903 868,649 282,247,552	Note
	Shares	Amount	Shares - - - - - - - - - - - - - - - - 79,860 50,000 - - - - 75,000	Shares - - - - - - - - - - - - - - - - - - - - - - -	Share profit 6,234,378 1,205,482 - - 142,111 3,104,370 1,005,129 29,662 - - - - 76,565 128 - 3,126 - - 68,656 - - - - 11,869,607 - 11,869,607	Share dividends (shares) - - - - - - - - - - - - - - - - - - - - - - -	Shares - - - - - - - - - - - - - - - - - - - - - - -	Shares 2,720,549 70 661,458 425,800 78 764,201 112,708 6,566 4,698 1,200 1,306 50 27,044 33 24 41,714 909,907 110,000 13 33 50,000 6 175,000	Holding % 28.56 22.66 32.92 50.00 100.00 24.94 29.06 33.33 33.33 28.72 45.04 50.00 45.00 33.00 50.00 24.34 25.00 33.33 25.00 - 50.00 100.00 25.00
	2,720,549 70 661,458 425,800 78 764,201 112,708 6,566 4,698 1,200 1,306 50 27,044 33 24 41,714 830,047 60,000 13 33 50,000 6 100,000	$ 88,895,784 73,752,455 7,370,058 3,348,562 54,549,382 9,887,171 7,229,423 1,229,109 22,825 19,667 19,662 1,261,244 508,991 4,140 1,345,390 231,786 7,301,722 578,907 783,265 - 337,734 13,756,981 1,000,818 273,435,076 2,362,892 $ 275,797,968									- - - - - - - - - - - - - - - - - - - - - Note 1

Note 1 : cumulative translation adjustments come from exchanging financial statements of Formosa Plastics Corp., U.S.A., Formosa Plastics Corp. (Cayman Ltd), Sky Dragon Investments Limited, Formosa Industries Corp.,U.S.A, Formosa Group (Cayman) Limited, into NTD, which are 1,473,527 thousand, (691,012) thousand, (227,690) thousand, 198,070 thousand and (16,603) thousand, respectively, and from translation adjustments of investees Formosa Petrochemical Corporation, Formosa Heavy Industries Corp., Mai Liao Power Corp., Formosa Sumco Technology Corporation, Formosa Transportation Corp., Formosa Environmental Technology Corporation, Formosa Resources Corporation, which are 132,519 thousand, (218,562) thousand, (119,835) thousand, (19,199) thousand, (22,474) thousand, (54) thousand and 379,962 thousand.

Note 2 : others come from recognition based on holding percentage of investees' pension actuarial report adjustment capital surplus and unrealized gains (losses) from financial assets in shareholder equity.The amount shown in Formosa Plastics Corp. (Cayman Ltd) includes realized gross profit of transactions between related parties.

Formosa Plastics Corporation

Statements of Financial assets at fair value through other comprehensive income - Non current

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name	January, 1	January, 1	Acquisition	Acquisition	Disposal	Disposal		Dividends from investees		Measurement Gain or Loss 2018 46,058 (194,592) 15,524 1,787 1,792 (4,403) - 10,764 84,582 98,408 2,550,825 7,939 (178,259) - 11,025 - (5,001) (963) (566,216) 1,879,270	December, 31 Shares Amount 68,743 2,335,200 39,574 1,147,440 1,103 29,505 1,769 67,336 1,287 11,628 20,471 257,935 2,071 - 2,642 96,758 2,925 265,371 11,657 501,865 3 6,307,880 2,160 54,810 354 190,447 - - 3,750 31,275 2,373 - 1,390 11,039 7,405 126,551 621,178 6,873,089 18,308,129	Guarantee /Pledge N/A `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Note
	Shares	Amount	Shares - - - - - 702 - - - 9,228 - - - - - - - - -	Amount - - - - - - - - - - - - - - - - - - - -	Shares - - - - - - - - - - - - - - - - 685 - -	Amount - - - - - - - - - - - - - - - - 6,848 - - 6,848		Cash dividends 137,486 137,597 110 - 798 - - 6,033 14,625 46,142 - - 70,662 - 975 - 1,087 - - 415,515			Shares 68,743 39,574 1,103 1,769 1,287 20,471 2,071 2,642 2,925 11,657 3 2,160 354 - 3,750 2,373 1,390 7,405 621,178
Asian Pacific Investment Corp. Mai-Liao Harbor Administration Corp. Taiwan Aerospace Corp. Chinese Television System Inc. China Investment & Development Co., Ltd. Formosa Plastics Development Corp. Xiangho Aircraft Leasing Corp. Formosa Petrochemical Transportation Corporation, Ltd. Formosa Technologies Corporation Formosa Plastics Marine Corp. Formosa Group Ocean Investment Corp. Inteplast Taiwan Corporation Formosa Plastics Maritime Corp. Taiwan Times Guangyuan Investment Corp. Central Leasing International Corp. Mega Growth Venture Capital Co., Ltd Minima Technology Co., Ltd. Formosa Ha Tinh (Cayman) Ltd. Financial assets, net	68,743 39,574 1,103 1,769 1,287 19,769 2,071 2,642 2,925 2,429 3 2,160 354 - 3,750 2,373 2,075 7,405 621,178	$ 2,289,142 1,342,032 13,981 65,549 9,836 262,338 - 85,994 180,789 403,457 3,757,055 46,871 368,706 - 20,250 - 16,040 127,514 7,439,305 $ 16,428,859											- - - - - - - - - - - - - - - - - -

Formosa Plastics Corporation List of Other Assets-Non current December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Materials for repairment and maintenance	$	752,980
Prepaid equipment expense		1,566,157
Others		5,292,497
Total	$	7,611,634

Formosa Plastics Corporation

List of Short-term Borrowings

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Banks Taiwan Cooperative Bank (Nanking- East-Road Branch) Taishin International Commercial Bank First Commercial Bank (Nanking- East-Road Branch) HSBC Bank (Taiwan) Ltd. Hua Nan Commercial Bank (Min- Sheng Branch) Land Bank of Taiwan Taiwan Business Bank, Ltd. Bank of China (Taipei Branch) Bank of Communication (Taipei Branch) DBS Bank Ltd. Mega International Commercial Bank Co., LTD. (Foreign Department) Oversea-Chinese Banking Corporation Limited Banco Bilbao Vizcaya Argentaria S.A. Bank of Taiwan (Chung-Shan Branch) Sumitomo Mitsui Banking Corporation	Description Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Loan for Material	Rate 1.650% 1.690% 1.650% 0.8% 1.650% 1.650% 1.650% 1.690% 1.690% 1.690% 0.0165% 1.690% 0.973% 1.630% 1.69%	Amount Mortgages or Guarantees $ 500,000 NA 700,000 `〃` 500,000 `〃` 700,000 `〃` 491,600 `〃` 700,000 `〃` 500,000 `〃` 1,500,000 `〃` 1,400,000 `〃` 2,500,000 `〃` 500,000 `〃` 500,000 `〃` 3,000,000 `〃` 500,000 `〃` 500,000 `〃` $ 14,491,600

Formosa Plastics Corporation

List of Bonds Payable

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Amount Paid 2,200,000 4,300,000 2,500,000 10,000,000 1,500,000 2,200,000 6,300,000 500,000 - 3,300,000 1,850,000 5,200,000 - - - - - - - - - 39,850,000	Premiums/ Discounts - - - - - - - 228 1,322 - 369 - 988 2,965 890 2,077 3,857 2,700 4,663 6,444 9,308 35,811	Ending Balance Issue Date Coupon rate Interest payment made Repayment method 2012.11.5 1.25%, annual , simple, once a year November Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 2012.11.5 1.39%, annual , simple, once a year November Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 2012.11.5 1.53%, annual , simple, once a year November Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 2013.6.10 1.23%, annual , simple, once a year June Payable in 2 equal installments at the end of the third and fourth year after the issuance day 2013.6.10 1.52%, annual , simple, once a year June Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 2013..11.8 1.42%, annual , simple, once a year November Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 2013..11.8 1.94%, annual , simple, once a year November Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 499,772 2014.5.21 1.83%, annual , simple, once a year May Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 4,998,678 2014.5.21 1.92%, annual , simple, once a year May Payable in 2 equal installments at the end of the eleventh and twelfth year after the issuance day - 2017.5.19 1.09%, annual , simple, once a year May Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 1,849,631 2017.5.19 1.32%, annual , simple, once a year May Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 2018.6.26 0.82%, annual , simple, once a year June Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 2,699,012 2018.6.26 0.93%, annual , simple, once a year June Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 1,397,035 2018.6.26 1.09%, annual , simple, once a year June Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 3,599,110 2020.6.22 0.58%, annual , simple, once a year June Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 3,747,923 2020.6.22 0.63%, annual , simple, once a year June Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 996,143 2020.6.22 0.67%, annual , simple, once a year June Payable in 2 equal installments at the end of the nineth and tenth year after the issuance day 4,297,300 2021.9.15 0.46%, annual , simple, once a year September Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 3,195,337 2021.9.15 0.52%, annual , simple, once a year September Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 7,493,556 2023.6.27 1.55%, annual , simple, once a year June Payable in 2 equal installments at the end of the fourth and fifth year after the issuance day 3,590,692 2023.6.27 1.62%, annual , simple, once a year June Payable in 2 equal installments at the end of the sixth and seventh year after the issuance day 38,364,189	Pledge/ Guarantee
			N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Formosa Plastics Corporation

List of Other Current Liabilities

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Accrued expense Unearned revenue Withholding payment Temporary receipt Other notes payable	Description Amount Salary (includes bonus) $ 3,060,728 Tax 75,120 Utilities expense 2,904,011 Freight fee 59,807 Interest expense 305,552 Insurance premiums 173,197 Pension 63,206 Others 794,047 7,435,668 Loan 1,291,955 Rent 4,664 Transfer money of bid 8,519 Others 380,039 1,685,177 Health and labor insurance expense 49,264 Others 9,178 58,442 Others 422,855 4,888 $ 9,607,030

Formosa Plastics Corporation

List of Operating Revenue (1)

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Products PVC PA Processing Aid Modifier Chloromothane Liquid Caustic Soda Flake Caustic Soda Hydrogen CI HCL VCM EPC Hydrofluoric Acid Micropearls Caustic Soda Chlorine Trifluoride Others Plastic Division HPAA MA Butyl Acrylate 2-Ethylhexyl Acrylate Ethyl Acrylate Syngas N-Butanol N-Butyraldehyde Isobutyraldehyde SAP Tairy Carbon Fiber Others Tairylan Division	Unit MT `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` KG MT `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Quantity 1,233,377.614 7,611.350 19,099.640 28,338.146 1,125,822.148 33,409.775 8,072.094 43,834.635 90,268.127 357,581.577 82,678.644 31,792.996 57,491.192 70,575.000 19,776.795 24,565.300 8,931.130 98,740.009 25,494.125 5,154.770 2,965.584 182,800.540 9,539.460 7,211.390 112,389.080 6,146.921 10,418.011	Amount
			$ 31,881,910 500,254 1,161,486 432,871 17,101,481 706,254 418,824 219,173 835,677 5,935,775 738,576 93,308 1,178,066 32,124 72,039 61,307,818 797,240 370,264 3,676,243 1,177,922 230,975 59,846 5,529,594 289,094 186,940 4,659,554 2,934,163 5,802 19,917,637

Formosa Plastics Corporation

List of Operating Revenue (2)

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Products PCC GCC TAICAL U-CAL Taiso Lime Nano-Ca Others Carbide Division HDPE LDPE EVA LLDPE Paraffin D.F.P level GZ Process Fuel Polyolefin Division Acrylonitrile MTBE MTBE Residual Acetonitrile B-1 Epichlorohydrin 30% HCL Methyl Methacrylate MMA DCP Chemistry Division DCS WMS Automation Maintenance RTPMS Electronics Special Project Department Extrusion Molding General Purpose Injection Molding Multi-Filament Molding Film Molding Block Copolymer Random Copolymer Compound Copolymer PP Products Out Of Standard POM Polypropylene Division DSC models DSC application element DSC Special project Department Total of Sales Revenue Total of Other Revenue Net Operating Revenue	Unit MT `〃` `〃` `〃` `〃` `〃` MT `〃` `〃` `〃` `〃` `〃` MT `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` MT `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Quantity 9,036.680 50,416.545 2,678.775 3,236.775 1,572.897 99,911.640 669.075 370,078.035 4,035.350 228,672.065 126,205.155 4,301.540 776.620 251,493.026 121,265.850 51,953.910 4,800.140 13,535.475 75,280.141 25,217.958 77,345.660 13,888.435 206.090 60,757.785 4,445.950 41,635.475 26,402.967 43,455.610 118,048.885 33,671.050 - 160.525 3,548.830 45,512.100 - - -		Amount
			107,229 201,569 38,976 72,881 150,537 444,619 32,467 127 1,048,405 13,002,747 128,005 11,830,349 4,262,300 123,158 544 29,347,103 9,057,917 3,428,340 957,749 273,121 428,914 2,781,004 236,303 3,497,136 762,946 1,030 21,424,460 744,132 331,475 270,987 151,689 81,650 1,579,933 2,224,123 150,173 1,420,099 892,899 1,485,994 4,023,154 1,283,808 52 7,643 77,700 2,351,766 13,917,411 704 331 1,035 148,543,802 1,817,269 $ 150,361,071

Formosa Plastics Corporation

List of Operating Cost

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Direct materials
Raw materials at the beginning of period (includes inventories in transit)
Purchase
Add : others
Less : raw materials at the end of period (includes inventories in transit)
others
Subtotal of raw materials
Supplies
Supplies at the beginning of period
Purchase
Add : others
Less : supplies at the end of period
others
Subtotal of supplies
Direct labor
Manufacturing overhead
Manufacturing cost
Add : work in process at the beginning of period (includes Machinery and accessories in process)
others
Less : work in process at the end of period (includes Machinery and accessories in process)
others
Cost of finished goods
Add : Finished goods at the beginning of period
Less : Finished goods at the end of period
Others
Differences of transfer pricing
Cost of goods sold
Idle Capacity
Loss on write-down of inventory
Gain from sale of scraps
Stock gain
Stock loss
Other operating costs
Total of operating costs

Amount
$ 1,301,689
88,304,340
66,322,368
(1,568,531)
(2,957,316)
151,402,550
726,622
27,301,168
8,091
(762,582)
(27,273,299)
-
2,797,745
63,449,577
217,649,872
3,280,702
1,550,477
(2,621,421)
(66,223,955)
153,635,675
9,959,569
(9,991,145)
(16,866,874)
(5,853)
136,731,372
2,330,390
4,471
(159,108)
(16,161)
2,414
1,689,603
$
140,582,981

Formosa Plastics Corporation

List of Manufacturing Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Salaries
Employees bonus expense
Meals expense
Pension
Main by-product
Depreciation expense
Fuel expense
Steam expense
Package expense
Utilities expense
Repair and maintenance expense
Rental expense
Insurance expense
Tax expense
Miscellaneous expense
Consumables
Travel expense
Internal arrangement expense
Freight fee
Pollution prevention fee
Security expense
Project improving expense
Research expense - researchers salaries
Research expense - researchers bonus
Research expense - researchers meal expense
Research expense - researchers pension
Research expense - depreciation
Research expense - repair and maintenance
Research expense - development
Research expense - travel expense
Research expense - project improving expense
Research expense - others
Other manufacturing expense
Total

Amount

$ 2,319,967
2,754
45,635
104,089
5,113,774
4,004,208
9,125,891
2,027,694
1,419,555
15,538,911
8,321,937
66,472
89,454
141,860
78,383
1,219,978
30,618
187,579
245,155
1,326,068
1,329,447
379,153
408,436
479
7,502
16,589
6,250
518,169
31,244
4,335
3,531
32,095
9,302,365
$
63,449,577

100

Formosa Plastics Corporation

List of Administration Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Salaries
Meals expense
Pension
Bonus expense
Benefit expense
Depreciation expense
Repair and maintenance expense
Rental expense
Insurance expense
Tax expense
Entertainment expense
Postage and phone expense
Transportation expense
Books and publications expense
Printing & supplies expense
Office equipment expense
Travel expense
Utilities expense
Freight fee
Medical expense
Internal arrangement expense
Miscellaneous expense
Computer user fee
Remuneration
Security expense
Donations
Material test expense
Advertisement expense
Overseas promotion expense
Pollution prevention expense
Fines
Others
Total

Amount

$ 2,059,561
46,897
105,694
2,489
41,212
298,016
441,458
25,089
7,437
103,387
35,828
21,283
37,838
5,093
4,508
1,311
103,234
140,962
7,539
5,649
11,765
347,459
165,124
16,138
73,555
359,611
9,180
4,184
15,166
125,950
681
156,090
$
4,779,388

101

Formosa Plastics Corporation

List of R&D Expense and Selling Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

R&D Expense `：`

Items Salary expense of researchers Meal expense of researchers Pension of researchers Bonus for researchers Depreciation Materials test expense R&D expense Travel expense Utilities expense Repair and maintenance expense Security expense Others Total Selling Expense: Items Salary expense Meal expense Pension Employees bonus Export freight fees of sea & air Export insurance expense Export commission Export freight fees of ground Export miscellaneous expense Customs clearance fee Export package expense Export port administration expense User fee of port facilities regards to export Export terminal handling charge Port user fee due to export Export storage expense Freight fee of domestic sales Employees benefit expense Depreciation Rental expense Entertainment expense Postage and phone expense Travel expense Miscellaneous expense Others Total	Amount	Amount
	$ 642,469 11,701 25,609 719 99,237 83,111 344,182 35,461 118,038 202,861 28,663 187,183 $ 1,779,234 Amount
		Amount
	$ 348,786 6,678 14,020 409 1,159,841 5,885 177,849 493,353 186,442 473 401,232 133,892 57,650 552,104 212,745 142,922 1,180,076 43,742 1,024 15,902 4,860 5,550 16,325 3,261 105,786 $ 5,270,807

Selling Expense:

102

Formosa Plastics Corporation

List of Other Revenue

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Interest revenue
Dividend revenue
Rent revenue

Description
Amount
Demand account
$ 149
Time deposits
118,689
Related parties - loans & receivables from payment on
behalf of related parties
62,130
Others
87,616
$
268,584
Nan Ya Plastics Corporation
$ 2,350,070
Formosa Chemicals and Fiber Corporation
188,807
Nan Ya Technology Corporation
713,278
Asian Pacific Investment Corp.
137,486
Mai-Liao Harbor Administration Corp.
137,598
Taiwan Aerospace Corp.
110
China Investment & Development Co., Ltd.
798
Formosa Petrochemical Transportation Corporation, Ltd.
6,033
Formosa Plastics Marine Corporation
46,142
Formosa Technologies Corporation
14,625
Formosa Plastics Maritime Corp.
70,662
Mega Growth Venture Capital Co., Ltd.
1,087
Guangyuan Investment Corp.
975
$
3,667,671
$
185,729

103

Formosa Plastics Corporation

List of Other Gains and Losses

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Gain on disposal of property, plant
and equipment
Net gain from foreign exchange
Net gain on disposal and appraisal
of financial assets
Other gains
Other losses

Description
Amount
$
388,794
Realized net gain from foreign exchange
$ 432,269
Unrealized foreign exchange loss - accounts receivable
(263,672)
Unrealized foreign exchange loss - other receviables
(1,594)
Unrealized foreign exchange loss - bank deposit & cash
equivalent
(44,614)
Unrealized foreign exchange gain - financing of import using
foreign currency
17,847
$
140,236
Gain on disposal of assets
$
78,878
Expense estimate surplus ( actual cost less than estimated cost)
$ 36,449
Gain from purchases of raw materials on behalf of others
89,055
Revenue from claims
971
Others
229,505
$
355,980
Expense estimate deficit ( actual cost greater than estimated cost)
$ (44,697)
Loss on materials
(106,813)
Others
(15,686)
$
(167,196)

104

Formosa Plastics Corporation

List of Financing Cost

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items
Interest expense

Description
Amount
Interest of short-term unsecured loans
$ 216,400
Interest of payable benefit to employees
2,727
Discount interest (banks financing interest paid by seller due to
L/C export & discount interest of bill of exchange of D/A export)
206,787
Interest of financing and reimbursement between related parties
56
Interest of short-term notes and bills payable
352,983
Interest of domestic bonds payable
426,814
Interest of long-term debts - syndicated loan agreement with Mega
Bills Finance Co., Ltd. & other long-term debts
219,887
Interest on rental expense
26,999
Service expense
38,686
Others
16
less : capitalized interest
(190,652)
$
1,300,703

AI assistant

Formosa Plastics Corporation — Audit Report / Information 2023

51762_rns_2023-12-29_43c15e6a-bdb3-4b32-8640-fb88b96a48d6.pdf

Table of contents

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

2. Valuation of Inventories

Other Matter

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notes to Readers

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Balance Sheets

December 31, 2023 and 2022

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(English Translation of and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Statements of Cash Flows

For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(1) Company history

(2) Approval date and procedures of the financial statements:

(3) New standards, amendments and interpretations adopted:

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

Basis of measurement

Functional and presentation currency

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(e) Cash and cash equivalents

(f) Financial instruments

(i) Financial assets

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

4) Business model assessment

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(g) Inventories

(h) Investment in associates

(i)

Subsidiaries

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(j) Joint venture

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(l) Lease

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) As a leasor

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(m) Intangible assets

(i) Recognition and measurement

(ii) Subsequent expenditure

(iii) Amortization

(n) Impairment of non-financial assets

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

2) Construction contracts

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(p) Contract costs

(ii) Costs to fulfil a contract

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(q) Employee benefits

(ii) Defined benefit plans

(iii) Short-term employee benefits

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(r) Income taxes

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(s) Earnings per share

Formosa Plastics Corporation Audit Report / Information 2023